As we wrote earlier today,
Anger about overly generous public employee pensions is the only single issue where the Republicans’ messaging polls well.
Without pensions as a rallying cry, Republicans are left with a series of positions that are wildly unpopular with Californians.
As reported in Sacramento Bee, Jerry Brown is taking this issue off the table by proposing the package of pension reforms that he has already agreed to with Republicans.
State workers will howl, especially the public safety unions, but it will avert a much harsher Republican initiative which is designed to cripple public employee pensions.
Republicans sacrificed their place at the table, and now we will see how Republican legislators play their game as petulant spoilers opposed to everything. They didn’t want to agree to eliminating waste and corruption by eliminating redevelopment and enterprise zones.
Will Republicans really have the gall to oppose pension reforms?
For the Governor’s press release click “read more”.
3-31-2011
SACRAMENTO – Governor Edmund G. Brown Jr. today released the actual bill language of seven separate pension reform measures.
In addition, Brown listed five other specific pension reforms that he is developing. These include a pension benefit cap, limits on post-retirement public employment, hybrid defined contribution/benefit options, an action plan to address CalSTRS unfunded liability, and a measure to change and improve the board governance of CalPERS and CalSTRS.
All 12 of these pension reform measures were presented and discussed in detail with Republican legislators. Talks broke down, however, over other issues.
Brown intends to introduce these pension reforms with or without Republican support.
Information on all twelve pension reforms is available below.
For bill language, please email [email protected].
PENSION REFORM PROPOSAL
APPLIES TO STATE AND LOCAL GOVERNMENTS
MARCH 2011
1. Eliminate Purchase of Airtime. Would eliminate the opportunity, for all current and future employee members of all state and local retirement systems, to purchase additional retirement service credit. (RN 14777) (Note Walters, SB 522, would eliminate Air Time)
2. Prohibit Pension Holidays. All California public agencies would be prohibited from suspending employer and/or employee contributions necessary to fund the normal cost of pension benefits. (RN 14777)
3. Prohibit Employers from Making Employee Pension Contributions. All California public agencies would be prohibited from making employee contributions that fund the normal cost of employee retirement benefits in whole or in part. (RN 14777)
4. Prohibit Retroactive Pension Increases. All California public agencies would be prohibited from granting any retroactive pension benefit increases, such as benefit formula improvements that credit prior service. (RN 14777)
5. Prohibit Pension Spiking: Three Year Final Compensation. Final compensation for new employees would be defined as the highest average annual compensation during a consecutive 36 month period. (RN 14777)
6. Prohibit Pension Spiking: Define Compensation as Only Regular, Non-recurring Pay. Compensation means normal rate of pay or base pay. (RN 14777) (Note Simitian, SB 27, would exclude from defined benefit changes in compensation principally for the purpose of enhancing benefits; would place stricter limits on creditable compensation)
7. Felony Convictions. Prohibits payment of pension benefits to those who commits a felony related to their employment. (RN 14777) (*Note Strickland, SB 115, similar prohibition)
PROPOSALS UNDER DEVELOPMENT
Impose Pension Benefit Cap.
Improve Retirement Board Governance
Limit Post-Retirement Public Employment
Hybrid Option
Address CalSTRS Unfunded Liability
Brown stabbed them in the back with a switch blade instead of a butcher’s knife. I doubt they are going to be grateful for his restraint. Judging by his performance up to this point, the deal will probably get worse before the issue is settled.
Which of the seven proposals are unfair or unwise? They all seem pretty reasonable to me.
…about negotiating against yourself, but on the whole these look like pretty reasonable reforms and present a pretty fair way to defuse “pension reform” as an issue among DTS voters. Even as a fairly labor-oriented guy, I agree that egregious cases of pension spiking, when reported publicly, can leave a pretty bad taste in your mouth (NY’s Long Island Railroad has become infamous for pension spiking, never something you want to be infamous for while cutting train service).
Out of curiosity, was there some particular activity that merited #3? As a periodic labor lawyer, I’ve seen tactics like this as a way to grease the wheels – sometimes, you need to call a spade a jack or a heart simply to break logjams. (Often, moral victories can be won by getting the Union or management to simply agree to definitional changes, even if substantive rights are left unchanged – this seems to be neither a moral victory and is also not necessarily a change to substantive rights).
So now, employees in cities where this was going on (is it going on right now?) will instead reasonably ask for those contributions that they now have to make to instead be reflected in a commensurate salary increase? Seems to be a zero-sum game, and I also don’t immediately see anything inherent in employers agreeing to make 100% of pension contributions that could fly in the face of GAAP or be abusable. Could someone explain what problem #3 is trying to address?
I’m not even complaining about it – as I said, it’s a change easily ameliorated by reconstructing compensation packages, so I’m not sure why that reform is, well, considered reform.
The most important thing is who the unions negotiate with. Even my most liberal friends see it as absurd that public employee unions can back politicians that then go on to negotiate the union contracts. Owning both sides of a negotiation table isnt negotiating all.
I’d hate to see yet another independent commission but there needs some wall separating that.
And before you even start on corporate lobbying/bribing I know that businesses that go through govt contracts still have to deal with bureaucrats whos jobs are to evaluate the contract and check competitive bids. Beneits are just passed in the legislature.
Bottomline this is the biggest thing that discredits benefits for public employees