Governor Supporting Pension Reform

APRIL 22, 2010

By KATY GRIMES

Yesterday Governor Arnold Schwarzenegger and Senate Minority Leader Dennis Hollingsworth, R-Murietta, announced that they’re supporting pension reform for state employees. The governor stated that while it is a compromise from his earlier hard line approach, something must be done immediately in order to avoid worsening economic disaster in California, and this effort seeks to bring the public employee benefit packages more in line with the private sector.

The bill, authored by

Pension Reform press conference

Pension Reform press conference

Hollingsworth, would only adjust the pensions of newly hired state employees, leaving benefits untouched for existing state employees.

The governor said that he did not believe it was right to take away the already committed pensions to existing state employees. But, he added, “We have to stop promising things the state can’t afford.”

When questioned about his change in tone and compromise, Schwarzenegger said that he had had many meetings with experts and determined that the state needs to compromise. He added that they are currently in talks with organized labor.

The governor was asked why he thinks this can be achieved now and in opposition to the powerful public employee unions, when he could not achieve this several years ago. Schwarzenegger stated that his answer is always the same: “Never give up.”

CalWatchdog Editor Steven Greenhut analyzed the bill, SB 919, yesterday: “SB 919 includes the following major reforms:

–  Reduces the retirement formula for non-public safety employees by requiring them to work 10 years longer before being eligible for full retirement benefits at age 65.

–  Requires public safety employees, including CHP, firefighters, correctional officers, and other peace officers to work 7 years longer in order to qualify for full retirement benefits at age 57.

–  Changes the final compensation calculation to take into account the highest 3 years of wages instead of the highest 1 year.

–  Ends state safety retirement benefits for milk inspectors, billboard inspectors, etc. and returns them to Pre-SB 183 Miscellaneous/Industrial classification.

–  Increases the amounts that employees must contribute toward their retirement by eliminating the exemption threshold. Currently, the first $200 to $800 of an employee’s wages is exempted from the employee’s calculation for retirement contribution. This bill eliminates that exemption amount increasing contributions to CalPERS, resulting in an estimated $2 billion in cost savings through 2040.”

Hollingsworth said he will provide more background and details of the bill in the next few days.

5 comments

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  1. James Hawn
    James Hawn 23 April, 2010, 15:11

    Do not even begin to act as if these empty suits really did something worth while.

    For the average person who does have any information concerning the state pension program, they do have a clue what this article really means.

    When in all reality, what was done, was not worth the time and energy it took to draft the article vaguely explaining nothing of any real value. This is just another HA-HA-HA-HA-HA by dear old Arnold Schwartzkennedy.

    Reply this comment
  2. EastBayLarry
    EastBayLarry 23 April, 2010, 15:23

    I noticed there was no mention of reducing the amount of the pensions. Shouldn’t that also be included in any “reform”?

    Reply this comment
  3. Ron Kilmartin
    Ron Kilmartin 23 April, 2010, 20:44

    Here is a thought. The pols cannot resist the unions. Instead, set up boards of average taxpayers who are paying income tax and property tax. Let them sit down with the unions who want 25% more (or whatever) than the private sector and let the union explain to these average folks why they should pay the union folks 25% more than they make.

    If the unions want bigger pensions, let the board consist of private sector average folks on private pensions who are paying income taxes on their pensions and SSI, and property taxes, all supporting the union folks; and let the union folks explain to the average folks on the board why their pensions should be greater than that of the board members, who have to pay for the union pensions. The union explanations will undoubtedly evoke a loud “tough s__t!” from the board; “if we can get by on SSI + $2000, so can you!”

    Teachers? The board should be tax-paying parents from the district. Let them explain why they should get 25% more (or whatever) with California schools rated lowest in the nation.

    As long as the politicians are the ones determining salaries and pensions, we will never bring local government budgets under control. They look to these same unions to finance their re-elections! Of course they will give the greedy unions what they want. Taxpayers are eternally screwed under this scheme, It can only lead to total societal chaos and downfall of local governments, agencies and districts that fail to control their budgets. Vallejo is example number 1. There will be more.

    Reply this comment
  4. EastBayLarry
    EastBayLarry 24 April, 2010, 08:14

    Great ideas Ron!
    I volunteer for the pension and teachers boards. I’m willing to serve on these boards for free!

    Reply this comment
  5. PRI
    PRI Author 24 April, 2010, 08:32

    Once again, Arnold is too late. He could have put a pension reform on the ballot in November. Instead, in February, along with Meg “No Controversies” Whitman, he backed out of supporting a pension reform for the Nov. ballot that was sponsored by the California Foundation for Fiscal Responsibility. (See Steven Greenhut article here: http://www.ocregister.com/articles/pension-236563-whitman-state.html)

    Arnold also dropped out of reform efforts in 2005.

    Some “action” governor. He’s really the NO Action governor.

    — John Seiler

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