State Treasurer Bill Lockyer said today that pension reform must lower costs on the public-sector side and strengthen retirement security for private-sector workers, remarks that echoed the new argument that public employee unions are making in defense of retirement benefits.
In his speech to the Northern California Public Retirement Seminar, Lockyer said the dual-track approach would help close the wide gap between public and private pensions and help ensure the "political sustainability" of public retirement systems.
Lockyer suggested that the next generation of public pensions should be "anchored" in Social Security, with a defined benefit component and a professionally-managed defined contribution component. He also thinks that Gov. Jerry Brown may propose a "three-legged stool" public pension program:
Governor Brown has said he plans to offer a public pension reform package. I have no special insight into what he may propose. But as I have said, I hope his plan will help bring long-term liabilities down significantly and soon, so that retirement security remains adequate and defensible, and that retirement costs get lower quicker.
It sounds as if the Governor will be looking at a hybrid, including a somewhat lower guaranteed defined benefit (perhaps better integrated with Social Security than today's model for those who are covered by Social Security), and a defined contribution plan
He also rejected proposals to alter benefits to current employees:
No, pension liabilities are not a problem in the sense they are so huge and insurmountable that retirees won't get what they've been promised. I'm a lawyer, and I can tell you that as long as we are living under US and California constitutions, those benefits that have been earned will be paid.
I'm also mindful that judges, too, have been promised their pensions.
Click here to read the text of Lockyer's speech.
PHOTO: Treasurer Bill Lockyer speaks at a 2009 legislative hearing. Sacramento Bee / Hector Amezcua
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