The State Worker

Chronicling civil-service life for California state workers

August 29, 2012
Reaction pours in to public pension reform plan

A roundup of press statements about the new public pension reform proposal announced Tuesday by Gov. Jerry Brown:

Rob Feckner, president, CalPERS Board of Administration:

The Conference Committee's proposed legislation is the result of a thorough process involving multiple hearings across the state. We thank the Committee for its commitment to hear the views and ideas of all stakeholders and wish to recognize those that have contributed to the process.

According to news reports, many of the elements of the legislation announced today, including anti-spiking legislation, a strong definition of pay rate, and prohibitions against retroactive pension enhancements, will go a long way to ensure sustainability of the retirement fund, reduce abuse and add protections, ease administration, and reduce pension costs over time.

Yvonne Walker, president, SEIU Local 1000:

"The best way to accomplish pension reform is through sound actuarial review and collective bargaining, not by a rush at the end of the legislative session," Walker said. "Throughout California, public employees have sat down with their employers, made concessions and hammered out cost savings plans to help get governments through the recession. Collective bargaining has proven it can work to solve these problems while the Legislature has waited until the eleventh hour to put out a complicated series of proposals."

Dean E. Vogel, president of the California Teachers Association:

We have been working in good faith with the governor and Legislature to obtain pension solutions that will move our state forward. This plan does not achieve that goal. This process has not been transparent, it does not recognize the tremendous cuts that have already been made to our schools, and it does not respect the disproportionate impact it will have, largely on women working in our classrooms. Instead, it will make it more difficult to attract and retain experienced educators to our classrooms.

... This proposal is not fair to teachers, public employees and will ultimately hurt our students and our state."

Marcia Fritz, president of Californians for Fiscal Responsibility:

The pension reform compromise announced today by Governor Brown is an important step to reform California's dangerously underfunded public pension systems. The provision requiring that almost all public sector employees pay half the cost of their pensions is the most significant of the reforms and will provide both immediate and long-term savings. Raising retirement ages and stopping abuses such as spiking, airtime, double-dipping and pension holidays are significant improvements. Given the precarious state of municipal finances it is critical that cities negotiate an equitable cost-sharing contribution plan for city employees well before the mandate takes effect in five years. A constitutional amendment to require public employers and employees to split the costs 50-50 would have been a more failsafe solution to this problem.

It is disappointing that the reforms did not include a hybrid system or another alternative that requires government employees to share the risk of investment losses with taxpayers. Any system that guarantees investment returns when none materialize will inevitably create unfunded liabilities that will burden taxpayers for many years to come."

Assembly Speaker John A. Pérez, D-Los Angeles

The comprehensive pension reform proposal to be reviewed by the Conference Committee meets and exceeds the Governor's pension reform proposal. We will outlaw the most objectionable pension practices, impose a cap on the maximum value of pensions, and generate the long-term savings that will ensure the fiscal health of state and local pensions. Assembly Democrats on the Conference Committee, Co-Chair Warren Furutani and Chair of the Committee on Public Employees, Retirement and Social Security Michael Allen, have taken their commitment to fair pension reform and helped provide an in-depth review of all the issues, including six hearings and 10 months of discussion. Their extensive efforts are clearly reflected in the final agreement.

Assembly Republican Leader Connie Conway, of Tulare:

Republicans have yet to see the actual language of the pension legislation that Legislative Democrats are pushing at the eleventh hour in the final days of session. By all accounts, it appears that Governor Brown is taking a step backwards in supporting a Democrat plan that is much weaker than the plan he himself has proposed - and which was strongly supported by Republicans.

Let's be clear - the Democrat proposal is no substitute for serious reforms to get our public employee pension crisis under control. This is no time for the liberal majority to pat themselves on the back and say the job is done. In the coming months, Republicans will continue to fight for the common-sense pension reforms needed to protect funding for education and public safety, while ensuring retirements that are fair to taxpayers and hard-working public employees alike.

State Treasurer Bill Lockyer:

The plan represents the most significant and far-reaching public pension rollback in California's history. It takes benefits much lower than they were in 1999. With these reforms, we could stop digging ourselves into a fiscal hole and start reducing future pension costs in a major way.

It may not be enough for those who want to break promises to workers, demolish retirement security and saddle taxpayers with unnecessarily high costs. But make no mistake, these reforms will make an enormous difference. They would lessen taxpayers' burden, shift more of the funding responsibility to workers, provide much-needed statewide uniformity, close loopholes and end abuses. They represent genuine improvements that would move the State and local governments further along the path to long-term fiscal stability. And they would help restore public confidence in government's ability to solve the big problems facing California.

The plan also achieves another crucial objective: It passes the adequacy test. It would ensure that after a lifetime of public service, workers could live their retirements not lavishly, but in modest comfort and the dignity they've earned."

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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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