Last year in a post entitled “Pension Reform Options,” the following suggestions were made – none of them terribly original – for ways to restore equity and sustainability to public sector pensions in California:
(1) Lower annual pension accrual to 1999 levels for new hires: (2) Lower annual pension accrual to 1999 levels going forward for existing (3) Reverse any retroactive pension accrual enhancement ever granted existing hires. (4) Retired public employees will see no change to their pension benefit. (5) Spread “final year” salary calculation over five years and eliminate “spiking.” (6) Establish ceiling on maximum pension benefit. (7) Raise eligible retirement age. (8) Reduce pension benefit by amount retiree earns in new job. (9) Eliminate tax-free or reduced tax pensions. (10) Aggregate multiple pensions under same ceiling. (11) Require conservative pension fund investment strategy. (12) Require public employees to contribute a fair share to their pension fund.
Last week a group advocating pension restructuring in California, the California Foundation for Fiscal Responsibility, published online two pension reform proposals. These proposals, put forward by experts on the issue, are interesting examples of what may be necessary in order to maintain pension solvency without either punitive tax increases or grotesque service cuts. They are also interesting because, along with including basic recommendations such the ones listed above, they include many nuances that most publicized pension reform proposals don’t cover. Because they are the product of in-depth analysis by qualified experts […] Read More