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Comparing pension plans: What Brown wanted and got

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POSTED August 28, 2012 8:54 p.m.

 

Gov. Jerry Brown introduced a 12-point pension reform proposal 10 months ago and announced an agreement with Democratic legislative leaders on Tuesday. Here are highlights of his proposal and what he got:

What Gov. Jerry Brown wanted ...

What he got ...

1

Require all new and current employees to contribute at least 50 percent of their retirement costs.

Requires new employees to contribute at least 50 percent of their pension benefits. Sets a similar target for current employees, but that is subject to collective bargaining.

2

Hybrid pension plan for future employees that includes a reduced, guaranteed defined benefit and a defined contribution portion such as a 401(k)-style plan.Adopt a cap on the defined-benefit portion of the hybrid plan, which would target a growing portion of public pensioners who receive benefits of more than $100,000 a year.

No hybrid.The state would include a cap on annual pension payments for new employees at $110,100 for most workers and $132,120 for employees not covered by Social Security, such as teachers and some public safety workers. There is no such cap for current employees.

3

Raise the age at which state employees are eligible for full retirement benefits from 60 to 67 to align with Social Security.

Raise the retirement age for civil service workers to qualify for full benefits at age 67. For public safety workers, the age goes from 50 to 57 and the maximum benefit formula is reduced.

4

Limit spiking for future employees by calculating pension benefits based on the highest average annual compensation for three years, rather than the current one-year system.

Requires three-year final compensation for all new employees.

5

Benefits would be calculated based on regular pay and would not include special bonuses, unused vacation time or overtime.

Calculates benefits based on regular, recurring pay to stop spiking.

6

Limit post-retirement employment for all employees.

Limits post-retirement employment for all employees.

7

Prohibit retroactive pension increases for all employees.

Prohibits retroactive pension increases for all employees.

8

Prohibit pension holidays, which allow employers to suspend contributions.

Prohibits pension holidays for all employees and employers.

9

Bar all employees from buying service credits known as "air time," which boost retirement service credit for time not actually worked.

Prohibits purchases of service credit for all employees.

10

Add two independent, public members with financial expertise to the board of the California Public Employee Retirement System.

No board changes.

11

Reduce retiree health benefits for future state employees and require new state employees to work for 25 years to qualify for the maximum state contribution to those premiums. State-provided retiree health care premium coverage would end at Medicare eligibility age, when the state would fund only Medicare premium coverage and limited health care benefits.

No retiree health care changes.

12

Forfeit pensions when any public official or employee is convicted of a felony in seeking office or at work.

Felons will forfeit pension benefits.

___

Source: Governor's office.

 

Comparing pension plans: What Brown wanted and got

 

Gov. Jerry Brown introduced a 12-point pension reform proposal 10 months ago and announced an agreement with Democratic legislative leaders on Tuesday. Here are highlights of his proposal and what he got:

What Gov. Jerry Brown wanted ...

What he got ...

1

Require all new and current employees to contribute at least 50 percent of their retirement costs.

Requires new employees to contribute at least 50 percent of their pension benefits. Sets a similar target for current employees, but that is subject to collective bargaining.

2

Hybrid pension plan for future employees that includes a reduced, guaranteed defined benefit and a defined contribution portion such as a 401(k)-style plan.Adopt a cap on the defined-benefit portion of the hybrid plan, which would target a growing portion of public pensioners who receive benefits of more than $100,000 a year.

No hybrid.The state would include a cap on annual pension payments for new employees at $110,100 for most workers and $132,120 for employees not covered by Social Security, such as teachers and some public safety workers. There is no such cap for current employees.

3

Raise the age at which state employees are eligible for full retirement benefits from 60 to 67 to align with Social Security.

Raise the retirement age for civil service workers to qualify for full benefits at age 67. For public safety workers, the age goes from 50 to 57 and the maximum benefit formula is reduced.

4

Limit spiking for future employees by calculating pension benefits based on the highest average annual compensation for three years, rather than the current one-year system.

Requires three-year final compensation for all new employees.

5

Benefits would be calculated based on regular pay and would not include special bonuses, unused vacation time or overtime.

Calculates benefits based on regular, recurring pay to stop spiking.

6

Limit post-retirement employment for all employees.

Limits post-retirement employment for all employees.

7

Prohibit retroactive pension increases for all employees.

Prohibits retroactive pension increases for all employees.

8

Prohibit pension holidays, which allow employers to suspend contributions.

Prohibits pension holidays for all employees and employers.

9

Bar all employees from buying service credits known as "air time," which boost retirement service credit for time not actually worked.

Prohibits purchases of service credit for all employees.

10

Add two independent, public members with financial expertise to the board of the California Public Employee Retirement System.

No board changes.

11

Reduce retiree health benefits for future state employees and require new state employees to work for 25 years to qualify for the maximum state contribution to those premiums. State-provided retiree health care premium coverage would end at Medicare eligibility age, when the state would fund only Medicare premium coverage and limited health care benefits.

No retiree health care changes.

12

Forfeit pensions when any public official or employee is convicted of a felony in seeking office or at work.

Felons will forfeit pension benefits.

___

Source: Governor's office.

 

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