Capitol Alert

The latest on California politics and government

January 7, 2011
AM Alert: Pension caps

The state pension fight is front and center today, as Assemblyman Jerry Hill introduces legislation to cap the benefits for public employees earning over $245,000 a year.

The bill, Assembly Bill 89, targets an exemption that Hill's office says allows workers at some tax-exempt institutions to be eligible for pension benefits, even if they earn over the federal limit.

One institution that fits that description? The University of California, which in 2007 received a waiver from the Internal Revenue Service to award pensions to high-earning employees.

Hill's measure comes as 36 UC executives earning over $245,000 are threatening to sue the university system, claiming they are eligible for higher pension benefits under the IRS formula. Top UC officials have have rejected their argument.

A press release issued by the San Mateo Democrat's office says staff members are trying to track down how many other institutions received similar wavers.

Hill is holding an 11:30 a.m. presser on the issue in San Francisco.

"The last thing California needs at a time when public entities are grappling with budget deficits is increasing benefits for employees making more than $245,000," he said in the release.

Our sister blog The State Worker has posted the bill language in full.

Editor's note, 2:12 p.m.: This post has been updated to correct the original, which said in error that several dozen UC Berkeley executives are threatening to sue the university system.


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