Gov. Brown Seeks Major Pension Reforms

LOS ANGELES (CN) - Gov. Jerry Brown on Tuesday unveiled a "sweeping pension reform agreement" he claims will save taxpayers billions of dollars by capping benefits and increasing the retirement age for state workers.

Brown said the agreement with state Democratic leaders will stop abuses and require state employees to pay at least half of their pension costs.

"These reforms make fundamental changes that rein in costs and help to ensure that our public retirement system is sustainable for the long term. These reforms require sacrifice from public employees and represent a significant step forward," Brown said.

Brown said that if the Legislature passes the reforms, public retirement benefits would be lower than when he took office during his first go-round as governor in 1975.

Brown said the agreement includes benefit rollbacks for public employees. It will require all current and future state employees to fund at least 50 percent of their own pensions, something Brown hopes becomes "the norm for all public workers in California," since the agreement removes state barriers that prevent local governments from increasing employee pension contributions.

Brown's plan also raises the retirement age for new state workers by two years and allows cities and counties to raise the retirement age of their employees as well.

The governor said the agreement bans abusive practices state workers have used to enhance pension payouts, such "spiking" and "air time."

Spiking gives employees big raises during their last year of employment to inflate their pensions.

Air time - which allows state employees to pad their retirement benefits by buying service credits - is one of several scandals rocking California's Parks Department.

"No more spiking, no more air time, no more pensions earned by convicted felons," Brown said. "We're cleaning up a big mess and the agreement reached with legislative leaders today is historic in its far reaching implications."

Pension reform has been on legislators' minds this year, particularly since the state's two main pension funds are underfunded by at least $150 billion.

Democrats seek to appear fiscally responsible as voters prepare to decide the fate of Brown's tax hikes in November.

If the initiatives fail, another sweeping round of trigger cuts will sting the Golden State again.

It remains to be seen whether the Legislature will send a bill to Brown's desk before the session ends Friday - especially in light of disapproval from of California's powerful public employee unions.

"We're upset that a Democratic legislature and Democratic governor feel obligated to take this out on working men and women in California," SEIU spokesperson Terry Brennand told KGO-TV Monday. "That's going to damage the ability of working men and women to retire in dignity."

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