The State Worker

Chronicling civil-service life for California state workers

November 6, 2009
More about the 'New Public Employees Benefits Reform Act'

As we reported last night, the California Foundation for Fiscal Responsibility on Thursday re-filed proposed ballot measures that would create a mandatory second-tier pension system for new public employees hired by the state, counties, cities and other non-federal government agencies in California.

The group put forward a similar measure in 2007, but it didn't have the financial support to gather enough signatures to qualify for a statewide vote. Foundation President Marcia Fritz figures it will take $2 million to gather the 1 million signatures needed to get the initiative before voters in the November 2010 election. She said no well-financed backer has stepped forward with a big check.

In a telephone interview this morning, Fritz outlined a strategy that includes an aggressive Web-based signature-gathering campaign and a push to get 2010 gubernatorial candidates such as Meg Whitman to take up the cause.

"We hope that the candidates will step up and help us raise money," Fritz said. "It would give us exposure and give them an issue to talk about."

Fritz, who runs an accounting firm in Citrus Heights, estimates the savings from the foundation's benefit rollback for new hires would save California $1 billion in pension costs one year after taking effect on June 30, 2011.

Some features of the plan:

  • Changes the retirement formula for new peace officers and firefighters from the current 3 percent times years of service at age 50 to 2.3 percent at age 58.
  • Cuts the formula for other newly-hired public safety employees, such as park rangers and game wardens, from the current 2.5 percent at age 55 to 1.8 percent at age 60.
  • Ties the full retirement age for all other employees to the federal standard. Those workers paying into Social Security would get a defined pension based on no more than 1.25 percent of pay. Those who don't contribute to Social Security would get no more than 1.65 percent.
  • Caps annual pension benefits at 75 percent of an employee's annual base wage.
  • Requires retirement benefits be based on a three-year average of base pay, excluding things like overtime, uniform pay, bonuses, longevity pay, accrued but unused vacation pay.
  • Requires that any public employee retirement enhancements go to a public vote. The foundation has filed two versions with the Attorney General, one requiring a simple majority vote of the people to enact enhancements and the other a two-thirds vote. Fritz said her group is seeking feedback before deciding which one to push for a public vote.
  • Click here to read one version and click here to read the other.

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    About The State Worker

    Jon Ortiz The Author

    Jon Ortiz launched The State Worker blog and a companion column in 2008 to cover state government from the perspective of California government employees. Every day he filters the news through a single question: "What does this mean for state workers?" Join Ortiz for updates and debate on state pay, benefits, pensions, contracts and jobs. Contact him at (916) 321-1043 and at jortiz@sacbee.com.

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