California pension reform deal elusive as lawmakers near recess
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State lawmakers are racing to try to reach an agreement on pension reform before they leave on a monthlong summer break Friday, but one leader of the effort said Monday that sticking points remain and he is not sure a full plan will be ready for adoption this week.
‘I don’t know if we’re going to do it this month,’ said Assemblyman Warren Furutani (D-Gardena), co-chairman of the legislative panel that is considering Gov. Jerry Brown’s 12-point pension reform plan.
The committee has given notice that it might meet Tuesday, but Furutani is doubtful a full plan will be ready by then. The Assemblyman said the committee leadership is on the same page as the governor on nine of the 12 points, including provisions to prevent pension spiking.
He said a draft proposal being considered by the committee would raise the age for full retirement benefits for new non-public-safety workers from 55 to 67. The proposal would allow someone to retire early, say at 60, but they would receive lesser benefits, he said. A sliding scale would sweeten the benefits the closer the worker gets to 67.
‘We’re looking at how to stretch it so that the impact will be an incentive to go to 67, but if people want to retire early, they can retire early with a minimum of hurt,’ Furutani said.
One sticking point is that the committee is looking at a hybrid plan that is different from the mix of defined benefits and 401(k)-style plan proposed by the governor. Furutani said lawmakers are trying to work out a plan that pays a defined benefit up to about $100,000, and then offers a cash-balance plan with a larger employee contribution and a lower guaranteed rate of return after that amount.
‘We don’t want the $100,000 club,’ he said, referring to past publicity about a large number of public employees retiring with more than $100,000 in annual pensions. But he added that the amount of the cap is still being discussed, and the governor has not yet signed off on the alternative idea.
-- Patrick McGreevy in Sacramento