The State Worker

Chronicling civil-service life for California state workers

August 16, 2011
Report details how public pensions are changing in California

110816 CalPERS contract amendment types.JPGState workers will identify with this: More and more cities, counties and school districts in California are lowering retirement benefits to new hires and offering financial incentives for long-time employees to leave, according to a report discussed during CalPERS' board meeting this morning.

Still, nearly four dozen contracts increased benefits during fiscal years 2009-10 and 2010-11, although "(m)any agencies are currently seeking advice on potential cost saving measures to help them find financial relief from the market downturn and budgetary concerns," the report to the fund's Benefits and Program Administration Committee says.

In the past two years, 129 of the roughly 1,500 contracts that CalPERS administers added the so-called "two tier" option as a means for government employers to cut costs, as the chart above shows.

Meanwhile, 65 contracts offered "golden handshakes" that entice senior employees to retire in exchange for additional service credit.

On the flip side, 45 contracts boosted their retirement formulas or switched from figuring pensions using an average of several years compensation to an employee's highest single year.

Second-tier pensions for new hires tended to be most popular with cities, towns and special districts. Public agencies offer golden handshakes more often than schools.

GRAPHIC: CalPERS April 16, 2011 agenda

CalPERS BPAC Retirement Contract Activity Report

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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


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