The State Worker

Chronicling civil-service life for California state workers

February 2, 2012
Jerry Brown delivers pension reform language to legislators

Gov. Jerry Brown has sent language for his 12-point pension reform plan to the Legislature's Conference Committee on Public Employee Pensions.

The proposals are divided into two groups. The constitutional amendment Brown offered broadly outlines the pension changes more narrowly defined in the language to change state law. The governor's plan won't go forward without two-thirds of the Legislature voting to put the constitutional changes on the Nov. 6 ballot, which would then need voter approval from a majority.

The changes would kick in Jan. 1, 2013. Labor agreements that contradict the governor's plan would prevail until the pacts expire.

The statutory language includes these proposals:

• Ends additional retirement service credit purchases, or "airtime."
• Forfeits all or part of pensions for elected officials or civil servants convicted of a felony associated with their offices or jobs.
• Ends retroactive pension enhancements.
• Ends "pension holidays" for employers and employees.
• Mandates that all employees pay "at least one-half" the normal costs for defined benefit plans or the defined portion of a hybrid plan. Employers may not pick up the employee share.
• Limits the hours and wages for retirees who return to government work.
• Calculates benefits based on a 36-month average of an employees' wages.
Narrows the definition of wages that can be included for pension calculation purposes.
• Establishes a hybrid pension system for new hires. It would replace 75 percent of an employee's income after 30 years of service and a "normal" retirement age of 57 for public safety employees or, for all other workers, 35 years of service at age 67.
• Sets 5 years and 52 years old as the minimum length of service and age that safety classes can qualify for retirement, 57 years old for all other groups.
Eliminates seats on the CalPERS Board of Administration now occupied by a member of State Personnel Board and an insurance industry representative
• Gives CalPERS board membership to the Department of Finance director.
Adds an independent health insurance expert and a representative from a contracting agency to the CalPERS board, both appointed by the governor.
Adds three public representatives to CalPERS' board, two appointed by the governor and one jointly appointed by the Assembly speaker and the Senate Rules Committee.
• Sets 25 years of service as the threshold to receive 100 percent of the state's retiree health benefit. Applies to new hires only.


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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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