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Gov. Jerry Brown to propose pension changes

October 26, 2011 |  7:12 pm

Gov. Jerry Brown will unveil a 12-point plan to overhaul the state public retirement system Thursday, proposing a payout for new state workers that combines elements of traditional guaranteed government pensions with a 401(k)-style savings plan, according to people who were briefed on his plan.

Brown will also raise the age at which state workers become eligible for their full pensions. Details of the governor’s plan were provided by numerous labor leaders, who received an outline of the proposal from the governor late Wednesday. They spoke on condition of anonymity because Brown asked them not to reveal details to the media.

Brown is expected to formally unveil his plan Thursday in Sacramento. His spokesman, Gil Duran, refused to confirm any specific provisions, saying: “The current system is not sustainable. I think the governor made that clear back in March,” when he released an outline of his suggested pension changes.

While components of the governor’s proposal would require voter approval, Brown is expected to first present his plan to the Legislature, sources said. A legislative committee is studying the issue and devising recommendations on pension-related legislation for next year.

The governor’s plan could test the governor’s relationship with his labor allies. Steve Smith, a spokesman for the California Labor Federation, noted that public employee unions have already agreed to concessions in recent years, including forcing members to pay a greater share of their own pensions and reducing payouts for new workers.

Still, he concedes the public may be looking for more.

“The Republican attack on pensions has been largely hyperbole, but it’s also been effective,” he said. “They’ve scapegoated public employees for a lot of the state’s problems, unfairly. But when you have Republicans all around the state on the same message for years, that’s going to have an effect.”

Other components of the governor’s proposal adhere closely to the pension outline that he released  in March, in the midst of budget negotiations with a handful of Republican lawmakers. He will ask legislators to take steps to curb pension spiking, prohibit retroactive pension increases for workers and eliminate workers’ ability to buy service credits for years they have not actually worked.

Brown is also looking to reconfigure the boards of the state’s two largest retirement systems, which have come under GOP attack for being too labor friendly and not having enough input from financial experts. That change would require voter approval, meaning Brown must first convince two-thirds of state lawmakers to place the measure on the ballot. Failing that, he would have to spend millions of dollars to qualify it through signed petitions.

Already, labor groups indicated they were unwilling to pick up the tab.

“Our unions aren’t going to put up a penny for a pension initiative,” said Dave Low, chairman of the Californians for Retirement Security, a coalition of labor groups fighting to protect public-employee pension benefits.


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