Labor unions wasted no time bashing the pension reform unveiled by Gov. Jerry Brown this morning as a unilaterally-imposed political exercise that needlessly guts state and local public employees' retirement for hundreds of thousands of workers.
"This is far more than 'low hanging fruit,'" said Dave Low, chairman of union coalition Californians for Retirement Security in statement issued while Brown was still holding a pension press conference in Los Angeles just before noon. "This is the fruit, the branch, the tree trunk, and the roots."
What particularly rankles labor leaders, however, was that none of this was bargained.
"When you get called in (to a meeting) and told, 'This is what we're going to do,' that's not negotiating," said Terry Brennand, a lobbyist for Service Employees International Union California.
A legislative joint committee is expected to release official pension reform language later today, but Brown's office put out a summary of the plan this morning.
The deal struck by Brown and Democrats in the Legislature would hit most current employees with higher pension contributions by mandating that they pay half the normal cost of their retirement benefits. Government agencies could bargain the higher payments but if they don't reach agreement after five years, the higher rate could be imposed.
The higher employee contributions would apply immediately to newly hired workers. New employees also would receive less-generous benefits than tenured colleagues and would have to wait longer to retire with a maximum percentage of their pay.
For future local miscellaneous employees, the formula changes 2.5 percent at 55 that current workers receive to 2 percent at 62 and a maximum of 2.5 percent at 67. For local fire and police employees: 3 percent at 50 changes to 2.7 percent at 57.
State employee unions already bargained similar formula changes for new hires in their last contracts.
The agreement also caps future employees' pensionable income at $110,000 if they contribute to Social Security and $130,000 for those who don't, such as teachers, police and firefighters. The plan also mandates that pensions' wage factors use an average of an employee's highest three years of regular recurring pay instead of the single highest year's total wages that many local governments use.
The legislation doesn't impact University of California employees. Legislators aren't affected either, since voters ended pensions for state lawmakers and constitutional officers who first entered state office after 1990.