Public employees loud in criticism of pension overhaul by Democratic allies

Although lawmakers rejected some of the governor’s harshest pension changes, public employee unions on Tuesday denounced the proposed plan and said they would consider going to voters or the courts to overturn some elements.

The proposal bypasses collective bargaining and represents the biggest rollback in public pensions in the history of California, according to Dave Low, chairman of Californians for Retirement Security, a coalition representing 1.5 million public employees and retirees.

“We are outraged that a Democratic Governor and Democratic Legislature are taking a wrecking ball to retirement security for teachers, firefighters, school employees, and police officers," Low said in a statement. "While we support common-sense changes to end spiking and abuse of the system, this package is unfair and wrong."

Appearing with a dozen public employees and labor leaders, Low objected to the proposal to put a $110,000 cap on the salary that pensions can be based on while raising the age for full retirement to 67 for new employees not involved in public safety jobs.

Requiring new and existing workers to increase the amount they contribute to their pensions so they and their employer each provide half is also a problem, according to Terry Brennand, senior government relations advocate for the Service Employees International Union of California. "It’s punitive. It attacks public employees for no reason," Brennand told reporters.

Maggie Ellis, a 20-year teacher at an  Elk Grove elementary school, charged the governor and legislators are pushing through the changes without an open process. Union leaders said Tuesday afternoon that they still did not have all the details of the plan."I am very disappointed in the lack of transparency on the last-minute pension deal,’’ Ellis said.

Brennand was also critical of the process. "This is not a bargaining process. This is a jam job," Brennand said.

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-- Patrick McGreevy in Sacramento

Questions swirl around Democrats' pension plan

As California lawmakers rush to make changes to public employee pensions this week, the most important questions -- how much will the plan save and why -- remain unanswered.

Gov. Jerry Brown said Tuesday that the proposals would save between $18 billion and $30 billion over the next 30 years, but administration officials did not release details on how he reached those numbers. They deferred questions about savings to California's pension system, known as CalPERS, but the response there was not encouraging.

"We can’t do a full and comprehensive analysis in the amount of time we have," said Amy Norris, a spokeswoman for CalPERS.

Instead, she said, officials were working on a "ballpark estimate of cost savings" that would be ready by Friday, when lawmakers are expected to cast their votes on the controversial plan. A more complete look may not be available until later, she said -- after changes to the country's largest public pension system are already voted on.

A report released by a committee of lawmakers examining pension issues did not provide any more details.

"FISCAL EFFECT: Unknown," the report said. "CalPERS and CalSTRS [the pension system for teachers] are in the process of preparing a fiscal analysis of the report. Savings are projected to be in the tens of billions over 30 years."

Also unclear is whether the pension plan will meet the requirement for a full actuarial study, which would analyze financial risk, before it is approved by lawmakers.

Neither Brown administration officials nor the spokeswoman for CalPERS would say whether they expect to meet that requirement this week. Legislative officials said the rules don't apply in this situation because the pension plan is moving through a special conference committee, not a regular standing committee.

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Jerry Brown set to outline pension changes

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Conservative activists, unions bash Jerry Brown's pension plan

-- Chris Megerian in Sacramento

twitter.com/chrismegerian

Photo: The California Assembly floor in 2008. Credit: Los Angeles Times

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.

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Photo: Gov. Jerry Brown unveils his pension plan at a Los Angeles press conference. Credit: Anthony York / Los Angeles Times

Jerry Brown set to outline pension changes

Gov. Jerry Brown and state lawmakers have reached a deal on tweaks to the state’s pension system, according to key lawmakers and administration sources. Brown is expected to outline the details of the agreement at a Tuesday morning press conference.

But the announcement will not be in Sacramento, home of the reporters that have followed the twists and turns of the complex policy and political negotiations over the last several months. Instead, Brown will fly from Oakland to Los Angeles on Tuesday to make the announcement at a hastily called press conference announced late Monday evening.

Brown spokesman Gil Duran said Brown chose Los Angeles for the announcement simply because it was the largest city in the state.

Under terms of the deal, the governor backed away from the centerpiece of his 12-point pension plan: a plan to turn pensions for new workers into a mix of the existing system, which guarantees payouts to workers, and a 401(k)-style plan, according to Assemblyman Warren Furutani (D-Gardena), chairman of the joint legislative committee dealing with the pension issue.

Instead, the proposal will cap the amount of salary that a pension can be based on at $110,000. Cities and counties and other local jurisdictions will have the option of offering an additional benefit to those who make more than the cap, but there will be no such option for state workers.

Brown will also introduce a tiered system that will allow workers to collect full pensions at age 67 and will increase the age to 57 for public safety workers, Furutani said. Currently, most state workers receive maximum pension benefits at age 63 –- up to 2.4% of their highest salary for every year worked, according to CalPERS.  

"We have landed the plane," said Furutani, a reference to the often difficult task of negotiating a pension deal with Brown. "This is going to be a major, comprehensive reform of the public pension systems."

Brown’s announcement is scheduled for 11:30 a.m. Stay tuned to PolitiCal for details.

-- Anthony York and Patrick McGreevy in Sacramento

California pension overhaul: Hurdles remain, and clock is ticking

The clock is ticking on Democrats’ efforts to make changes to the state’s public pension system, and according to state law and legislative rules, a lot has to happen before any legislation can come up for a vote.

For starters, Democratic leaders and Gov. Jerry Brown need to reach a final agreement on a couple of key sticking points. Brown fleshed out his 12-point pension proposal earlier this year, a plan which was openly embraced by Republicans in the Legislature.

But Democrats have balked at Brown’s call for a hybrid plan for new employees that would blend a 401(k)-style plan with the current guaranteed benefit system. Talks are now centered on where to cap the amount of an employee’s salary that could be used for the guaranteed benefit, according to sources close to the pension discussions.

The two sides are also at odds over Brown’s proposal to split retirement costs evenly between employees and employers. Brown called for a 50-50 split for all current and future state employees. Democrats want those discussions to be subject to collective bargaining negotiations.

There is continuing disagreement on where to set the retirement age for most public workers. Brown wants employees to be 67 before they would be eligible to receive a full pension.

But reaching agreement is just one of the obstacles to be overcome. According to state law, any changes to state pensions must be subject to a full actuarial study before being approved. Legislative sources said no such study has been conducted yet, which makes sense, given the fact that there is no final agreement to analyze.

Lawmakers are also running out of time to hear the bill. According to legislative rules, the deal must be in print one “legislative day” before being voted on in committee, and three calendar days before the end of the legislative session. This year’s session ends on Friday.

Those legislative rules can be amended, but only with a two-thirds vote of the Legislature, which means Republicans would have to go along. But the recent track record by Democrats to get Republican votes for controversial proposals is not a good one.

That means a final deal would have to be in place, and in print, no later than Tuesday morning or risk falling apart altogether.

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In final week, Legislature still must grapple with pension overhaul

California Teachers Assn. a powerful force in Sacramento

State gives initial OK to $1.4 million for lawsuit settlements

-- Anthony York in Sacramento

In final week, Legislature still must grapple with pension overhaul

State lawmakers enter the final week of their legislative session facing hundreds of bills, including controversial proposals to overhaul California's overburdened public pension system, revamp its costly workers' compensation program and change the way corporate taxes are assessed.

As detailed in Monday's Times, legislative leaders are hoping to convince voters that they are responsible stewards of taxpayer money -- and turn the page on an embarrassing budget scandal within the parks department and a bevy of legislative pay raises.

All eyes will be on efforts to make big changes to the state's public pension system.

Gov. Jerry Brown has pushed lawmakers to remake the state pension system, but the Democrats who dominate the Legislature have been reluctant to adopt key parts of the 12-point plan he proposed last year. Brown wants to raise the retirement age for most new public workers from 55 to 67 and adopt a hybrid 401(k)-style benefit plan for new hires.

Lawmakers are expected to debate a modified proposal that tackles abuses such as pension "spiking" but permits retirement earlier than 67. They have also been discussing a possible cap of about $100,000 on how much public employees can receive from a state pension plan, with workers having the option of also paying into a cash balance plan that would guarantee a specified rate of return.

The Legislature will also take up other controversial measures in the final days of its two-year session, including a bill that would authorize the Department of Motor Vehicles to issue driver's licenses to illegal immigrants who are granted work permits under a new Obama administration program.

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--Michael J. Mishak in Sacramento

Twitter.com/mjmishak

Photo: Assembly Speaker John A. Pérez (D-Los Angeles) and Senate President Pro Tem Darrell Steinberg (D-Sacramento) answer questions at a news conference in 2011. Credit: Associated Press /Rich Pedroncelli

Business leaders push public pension changes in Los Angeles

While state lawmakers in Sacramento mull public pension changes, another battle is brewing in Los Angeles. 

Kate Linthicum and David Zahniser report in Thursday's Los Angeles Times that a coalition of L.A. business leaders is pushing the city to tackle the rising cost of public employee pensions. 

Mayor Antonio Villaraigosa has already suggested scaling back benefits and increasing the retirement age for new employees. But the proposal being pushed by the business leaders would also affect current employees.

David Fleming of the Los Angeles County Business Federation said supporters may ask for residents to vote on the plan if city leaders don't make changes on their own.

Residents in San Jose and San Diego have already approved pension cutbacks for public employees in those cities.

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Photo: Los Angeles Mayor Antonio Villaraigosa. Credit: Al Seib / Los Angeles Times

Field Poll shows mixed views about California public pensions

A public employee group says it is encouraged by a new Field Poll that indicates California voters have mixed views on whether government pensions are too generous.

While 37% of voters thing benefits for local and state government workers are excessive, 36% say they are about right. Some 17% think the benefits are not generous enough.

The poll found that 67% of voters support establishing an upper limit or salary cap when calculating pension benefits.

But a plurality of 50% of voters oppose linking deficit reduction efforts to taking away collective bargaining rights for public workers, the Field Poll found.

Dave Low, chairman of Californians for Retirement Security, said the poll indicates to him that there is strong support for common-sense improvements to end abuses "but not for a dramatic overhaul that will undermine collective bargaining."

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Mayors implore legislators not to undermine local pension cutbacks

Have Sacramento lawmakers been scheming to unravel tough new measures voters imposed to limit pensions of public employees in San Diego and San Jose?

Mayors in both those cities fear they have been, and letters they sent to key lawmakers this week raise new questions about what caused talks in Sacramento over overhauling the pension system statewide to fall apart earlier in the week.

“I ask that you respect the will of our voters and allow us to implement their will,” San Jose Mayor Chuck Reed, a Democrat, wrote. He warned that undermining the city could lead  to insolvency or bankruptcy and said it would amount to “a travesty of the Democratic process and a violation of the voters’ constitutional rights.”

San Diego Republican Mayor Jerry Sanders noted in a letter to Senate leader Darrell Steinberg (D-Sacramento) that changes to the pension system recently approved in San Diego had support of 66%  of voters. “Any attempt to nullify their vote would be a slap in their face and an insult to the democratic process,” his letter said.

The Senate leader says it's all a misunderstanding and that they have no intention of changing the rules imposed last month by voters in San Diego and San Jose. Steinberg called the San Diego mayor to assure him the will of voters would stand, according to the mayor’s office.

But lawmakers are keeping secret the draft pension plan they presented to Gov. Jerry Brown.

Officials with the Brown administration, which opposes any rollback of the pension changes made by the two cities, will not confirm or deny that Democratic lawmakers have been pushing to do so behind closed doors and refused to release the plan. Rather, they are calling for lawmakers to publicly disclose it, contending that it would not save the state the $40 billion Democrats claim it would.

“There can't be a true debate on this matter until the Legislature's plan is released for public review,” Brown spokesman Gil Duran said.

Brown put the brakes on pension talks in Sacramento on Tuesday, saying through a spokesman that the gulf between him and Democratic lawmakers remained wide and that it would take time to bridge their differences.

The governor wants lawmakers to pass a pension plan when they return from their summer recess in August.

Read the letters:

Letter from San Jose Mayor Charles Reed

Letter from San Diego Mayor Jerry Sanders

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Photo: San Jose Mayor Charles Reed. Credit: Paul Sakuma / Associated Press

State Senate leader predicts pension reform next month

 

Despite a setback on pension reform, Senate President Pro Tem Darrell Steinberg (D-Sacramento) said Tuesday that he expected a plan to be adopted next month and that the Legislature’s proposal would save $40 billion over 30 years.

Those savings would accrue to the California Public Employment Retirement System through changes including an increase in the retirement age for new employees, a requirement that workers contribute more and a cap on the benefits possible in a defined benefit plan.

Gov. Jerry Brown announced Tuesday that he and lawmakers were divided over how to change public employee pensions, and therefore a deal would have to wait until at least after the Legislature's July recess.

"We are in common agreement with the governor on most elements of his original proposal," Steinberg told reporters, but added "There are still several issues that frankly are of sufficient complexity  that they just need more time to get it right."

Steinberg refused to release the Legislature's plan but provided a few details. Non-public safety employees would get the most benefits if they waited until age 67 to retire, but they could leave earlier and receive lesser amounts.

He also confirmed that the Legislature was looking at capping the amount that can be received in a defined benefit plan by new employees. Other state officials said the cap would be about $100,000 but that employees would also be given a cash balance option above that where employees would make bigger contributions and would be guaranteed a return, albeit one lower than the defined benefit plan's.

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 Photo: Senate leader Darrell Steinberg (D-Sacramento) says there is momentum in favor of pension reform. Credit: Rich Pedroncelli / AP