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Gov. Schwarzenegger convinces two more unions to agree to pension concessions, pay cutbacks [Updated]

June 28, 2010 | 11:30 am
Two more public employee unions -- representing doctors, dentists and engineers -- have agreed to tentative contracts with Gov. Arnold Schwarzenegger, expanding to six the number of labor unions the governor has persuaded to accept pay cuts and pension rollbacks.

Schwarzenegger on Monday announced the deals, which include requiring employees to work additional years before qualifying for full pensions and contributing 5% more of their salary to cover retirement costs. The new agreements cover roughly 14,000 state employees.

The deals also include one unpaid leave day a month during the fiscal year that begins July 1. That is the equivalent of nearly a 5% pay cut and, combined with the other changes, will save the state $66 million in the budget year.

"These agreements continue the progress toward critically needed pension reform in California," Schwarzenegger said in a statement.

The unions also agreed that new employees would have to work 25 years, up from the current 20, to be eligible for full retiree health benefits. Current union members also agreed to chip in 0.5% of their salaries to cover retiree health benefits beginning in July 2012.

[Updated at 2:48 p.m.: Only the International Union of Operating Engineers agreed to the changes for retiree health benefits. Also, for both unions only future employees must work additional years before qualifying for full pensions.]

The deals must still be ratified by rank-and-file members of the Union of American Physicians & Dentists and the International Union of Operating Engineers. State lawmakers must also sign off on the accords.

Schwarzenegger still has not been able to come to terms with California biggest public-employee unions but hopes these new deals pressure them at the bargaining table. Earlier in June, he announced pacts with four labor groups representing 23,000 state workers.

The governor's office said if similar agreements are reached with all of California's remaining unions, the state would save $2.2 billion in the coming fiscal year, of which $1.2 billion would help close California's $19.1-billion general fund deficit.

-- Shane Goldmacher in Sacramento

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