CA: Democrats introduce pension plan

Monterey Herald ^ | 4/30/05 | Andrew Lamar - Contra Costa Times

[NormsRevenge]

SACRAMENTO - Senate Democrats rolled out a counterproposal to Gov. Arnold Schwarzenegger's pension reform plan Friday, proposing to crack down on fraud and smooth cost fluctuations for government agencies.

The plan would essentially leave the current system intact -- stopping short of the Republican governor's wishes to institute a 401(k)-style program. But the Schwarzenegger administration applauded the proposal, saying it could serve as the foundation for a compromise.

"The fact that they want to put pension reform on the fast track is absolutely a positive development and one that we welcome," said H.D. Palmer, a spokesman for the governor's Department of Finance. "This marks the first substantive response to the governor's call in January for pension reform."

Schwarzenegger pushed a measure to put all non-federal public employees in California hired after July 1, 2007 on a 401(k)-style plan but withdrew his support for it after police and firefighters criticized the plan for eliminating death and disability benefits.

Since the governor reversed his position April 7, the administration has held talks about how to reshape the plan with law enforcement groups and others, Palmer said.

"Our goal has been and is to get the state on a more predictable contribution pattern for pensions and we want to eliminate the risk that the taxpayers hold completely when the market has a downturn," Palmer said.

The governor has pointed to the skyrocketing pension costs for government agencies as the justification for dramatically remaking the system.

Pension costs for the state have grown from $160 million in 2000 to $2.6 billion this year.

Under the current system, employees are guaranteed benefits based on the highest salary they earn and their years of service. The state's pensions are considered some of the most generous in the nation.

That system would continue under the Democrats' proposal, but it would restrict what employees can claim as compensation -- eliminating additional perks, such as car and uniform allowances, that can inflate salaries and in turn pension rates.

The proposal also aims to cut down on fraud by requiring any employee over the age of 50 retiring due to disability to undergo a medical evaluation up to three years after making the claim. Statute of limitations for fraud cases would be extended from three to 10 years.

"These bills will reduce the potential for pension abuse, protect workers and retirees and bring about general fund stability the state budget needs," Senate leader Don Perata, D-Oakland, said in a statement.

Jim Hard, president of the Service International Employees Union Local 1,000, which represents 89,000 civil servants, said he's happy with the plan's concepts but must study the details further.

"We're open to looking at this stuff, definitely," he said.

But Assemblyman Keith Richman, R-Northridge, who authored the administration's proposal, said the Democrats' plan doesn't go far enough.

State employees will still receive rich rewards that governments can't afford, he said. Nowadays, municipal workers can retire at age 55 with 90 percent of their salary and full health benefits.

"We need to do much more," Richman said.

[Torie]

Government employee pensions are one of the great rip offs of the modern age. It is a scandal. Pity so few voters understand the ins and outs. So the end game, is that future taxpayers, pay, pay, pay. I put this one on Arnold's doorstep. He failed to get a brain trust together to game a teflon initiative, that could not be sound bited to death, and thus abandoned.