Conservative activists, unions bash Jerry Brown's pension plan
Gov. Jerry Brown unveiled what he called a “radical change” in the pension system for public employees, even though the plan fell short on some of the most significant goals of the governor’s original proposal.
Speaking to reporters in Los Angeles, Brown said the tweaks he and legislative Democrats have agreed to in principle would save the state from $18 billion to $30 billion over the next 30 years. Though he provided no details on where the savings would come from, Brown said his finance department would produce those numbers shortly.
“It will take public retiree benefits back to below where they were when I was governor the last time,” he said.
The plan sketched by Brown on Tuesday differs from his original 12-point plan which he first unveiled last year. Most notably, it backed away from forcing new employees into a hybrid plan which would have combined the current guaranteed benefit system with a 401(k)-style retirement account.
Brown's plan also boosts pension payouts for workers who stay at work longer. Under current law, most employees earn up to 2.4% of their highest annual salary for every year of public employment if they retire at age 63 or older. Under Brown’s new plan, the top rate would jump to 2.5% per year, but workers would have to stay until age 67 to collect that maximum pension.
As with current law, workers can retire earlier for a smaller pension. But Brown’s office did not provide a breakdown of those new retirement tiers.
“This goes beyond what I proposed in the campaign,” he said, pointing to a new $110,000 cap on an employees salary that could be used to calculate a worker’s pension, and mandating that local workers pay half of their pension costs.
But Brown’s critics said Tuesday’s announcement amounted to the governor walking away from the central tenets of his earlier proposal.
“They’re not changing the benefits that we have in any substantial way,” said Dan Pellessier, president of California Pension Reform, which has proposed radical changes in worker benefits. “I can’t believe the governor is going along with this. I had such hope he was going to hold the line and do something substantial.”
The plan was also met with initial opposition from Brown’s labor allies, who said the proposal was a betrayal by the Democratic governor. At a press conference after Brown’s, a coalition of union groups said they were already mulling legal challenges to the governor’s proposal.
The plan also eliminates a number of perceived abuses in the pension system that had wide bipartisan support, ending the practice of pension spiking, prohibiting felons from collecting retirement benefits and eliminating the ability for workers to purchase credits for time they haven't actually worked.
— Anthony York
Photo: Gov. Jerry Brown unveils his pension plan at a Los Angeles press conference. Credit: Anthony York / Los Angeles Times