The debate over public employee pensions took an unexpected turn last February when the state's Little Hoover Commission suggested what had been the unthinkable: Change pension benefits promised to current state and local government employees.
A locally based research group, Californians for Fiscal Responsibility, had called for changing the guaranteed benefits promised to current employees. But now a government entity was suggesting the legally precarious and politically explosive idea.
The commission said that the public pension crisis is so severe that changing benefits for future workers won't fix it quickly enough. So the bipartisan panel said that state and local governments should freeze their defined-benefit pension promised to current employees and then prospectively place them into cheaper "hybrid" plans that blend smaller traditional pensions with more volatile 401(k)-type savings programs.
Both sides of the pension debate said that such a move would undoubtedly spark litigation. Conventional wisdom holds that pension promises are protected by both state and federal law, but the commission's report said that the principle should be directly tested in the courts.
Here's the link to the most-viewed State Worker blog post of 2011: "Commission's plan rolls back pensions for current workers," which ran on Feb. 24.
Postscript: The idea to alter pensions promised to current employees is dead for now. Two proposed ballot measures to alter pensions offered by another local group, California Pension Reform, and a plan promoted by Gov. Jerry Brown focus on lowering benefits for workers hired in the future.