warning Hi, we've moved to USCANNENBERGMEDIA.COM. Visit us there!

Neon Tommy - Annenberg digital news

Gov. Brown Announces Pension Reform

Amanda Martinez |
August 28, 2012 | 5:51 p.m. PDT

Supervising Executive Producer

 

Brown's plan is part of a compromise with Democratic legislative leaders to change pension benefits. (Creative Commons)
Brown's plan is part of a compromise with Democratic legislative leaders to change pension benefits. (Creative Commons)
Gov. Jerry Brown announced a pension reform Tuesday that he said will save taxpayers billions of dollars by capping benefits, increasing the retirement age and ending abusive practices.

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.

 



 

Buzz

Craig Gillespie directed this true story about "the most daring rescue mission in the history of the U.S. Coast Guard.”

Watch USC Annenberg Media's live State of the Union recap and analysis here.