Gov. Brown Announces Pension Reform
According to a press release issued by the governor's office, the pension reform agreement would now require current state employes and new public employees to pay for no less than 50 percent of their pensions. The new plan will also eliminate current state barriers that keep local government from increasing employee contributions.
The Washington Post reported the reform does not allow new government workers to be part of a 401(k)-style plan or reduce retiree health care costs. Other notable changes include preventing government workers from collecting pensions if they are convicted of a work-related felony and stopping the practice of "spiking," which gives employees large raises in their final year of employment to help inflate pensions.
Pension reform has been a prominent issue this year after the state's two main pension funds were underfunded by at least $150 billion. Critics of the proposal claim it does not address long-term liability of the state's pension systems because the plan primarily focuses on new employees. Labor unions also took issue with the reforms, claiming they affect bargaining units and situations.
Read the full story at the Washington Post.
See more of Neon Tommy's coverage on Brown's budget cuts here.
Reach Supervising Executive Producer Amanda Martinez here.