Highlights of Gov. Jerry Brown's pension proposal
• Equal sharing of pension costs: Require all new and current employees to contribute at least 50 percent of their retirement costs, shifting the burden from public employers, some of whom currently make the entire contribution. This portion of the proposal would be phased in. Employers and employees would be barred from suspending contributions.
• Hybrid pension plan for future employees: Form a mandatory "hybrid" risk-sharing pension plan for new employees. New plan would include a reduced, guaranteed defined benefit, a defined contribution portion such as a 401(k)-style plan and Social Security. The goal would be to replace 75 percent of an employee's salary, based on a 30-year career for public safety employees, or 35 years for non-public safety employees.
• Cap for high-income public employees: Adopt a cap on the defined-benefit portion of the hybrid plan, which might affect a small but growing portion of public pensioners who receive benefits of more than $100,000 a year.
• Higher retirement age for future employees: Raise the age at which state employees are eligible for full retirement benefits from 60 to 67 to align with Social Security. The administration has not calculated a minimum retirement age; it currently is 55. Raise the retirement age beyond the current age 50 for newly hired public safety employees to an age based on their ability to perform the job and maintain public safety.
• Limit spiking for future employees: For new employees, calculate pension benefits based on the highest average annual compensation for three years, rather than the current one-year system. Benefits would be calculated based on regular, recurring pay and would not include special bonuses, unused vacation time or overtime.
• Base benefits on regular, recurring pay: Ban employees from counting additional pension benefits from bonuses, unused vacation time, overtime and other perks.
• Limit post-retirement employment: Limit all current and future employees in their post-retirement work for California government entities to 960 hours per year. Ban all retired employees from earning retirement benefits for service on public boards and commissions.
• Prohibit retroactive pension increases: Prohibit retroactive pension increases based on earlier retirement or higher benefit levels for all employees.
• Prohibit so-called "pension holidays:" Ban all employers from suspending contributions.
• Prohibit "airtime" purchases: Bar all employees from buying service credits known as "air time," which boost retirement service credit for time not actually worked.
• Change composition of pension boards: Add two independent, public members with financial expertise to the board of the California Public Employee Retirement System. Replace the State Personnel Board representative with the director of the Department of Finance. Brown also is recommending that other public retirement boards make similar changes.
• Reduce retiree health benefits for future state employees: Require new state employees to work for 15 years to become eligible for any state-funded health care premiums and 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.
• Limit felons' receipt of pension benefits: Forfeit pensions when any public official or employee is convicted of a felony in seeking office or at work.
SACRAMENTO (AP) — It's been six months since Gov. Jerry Brown put forward his proposals to make the public pension system more affordable, yet action on his 12-point plan has been nearly imperceptible.
That has led Republican lawmakers to accuse the Democrats who control the Legislature of stalling. Democrats acknowledge the slow pace, yet say they are making progress and intend to enact reforms before the session ends in August.
"It's not as fast as I would like, but it's complicated," Senate President Pro Tem Darrell Steinberg, D-Sacramento, said this week during an appearance before the Sacramento Press Club.
He said Democrats have an obligation to deliver pension reform, particularly as they will ask voters in November to approve hikes to the income and sales taxes. But he also said they have "a different take" on parts of the governor's plan.
Brown's reform packaged called for increasing the retirement age to 67 for new, non-public safety employees and having local and state government workers pay more toward their pensions and retiree health care. Among other changes, the governor would put new workers in a hybrid plan that includes a 401(k)-style vehicle.
Frustrated that Brown's reform package had not been translated into individual bills, Republican lawmakers earlier this year did it themselves. They submitted a legislative package that copied Brown's 12-point plan and asked that it be heard by the Conference Committee on Public Employee Pensions, which has held five hearings throughout the state reviewing retirement benefits for public employees.
Sen. Mimi Walters, R-Lake Forest, criticized the hearings that have taken place so far, saying they have focused on how the state's two pension systems operate and receiving updates on local government pension proposals.
"It has been more fluff and not so much substance," she said.
Walters said the Legislature needs to enact meaningful pension reforms this year, as Brown has requested, for Democrats to have credibility when they ask voters to approve higher taxes in the fall.
Like public pension systems across the country, the retirement benefits offered by the state and by California's cities, counties and school districts have in many cases far outstripped the funding needed to pay them.
Pension systems have unfunded liabilities owed to future retirees in the tens of billions of dollars, and critics say many local governments are being forced to cut public safety, parks, libraries and other services to pay generous pension and retiree health care costs.
The California Public Employees Retirement System, the nation's largest public pension fund, runs a $235 billion fund for more than 1.6 million state employees, non-teaching school employees, local government workers and their dependents. The system has an unfunded liability of around $85 billion.
The $144 billion California State Teachers' Retirement System manages a fund for more than 600,000 active and retired teachers and has $64.5 billion in unfunded liabilities.
Brown's administration has estimated that his proposed changes would reduce the state's contributions by $4 billion to $11 billion over the next 30 years if his plan is implemented. Other government entities, such as courts, school districts, cities and counties, would see their own savings.
But CalPERS found that the governor's hybrid plan may not significantly reduce costs for the state even while it would lower benefits for new workers and shift more of the risk to employees. The pension fund analyzed the governor's plan at the request of the legislative conference committee.
Brown, a Democrat, released his plan in October and asked the Legislature to tackle the issue. Senate Republicans unsuccessfully urged Brown to call for a special legislative session at the end of the year.
In February, GOP leaders in the Senate and Assembly announced a package of bills identical to the Democratic governor's proposal. This month, they followed up by sending letters to the governor and Democratic lawmakers, urging a special committee on public employee pensions to take up the governor's plan.
"If you fail to allow a vote on the governor's pension reform proposal in committee, you will be denying all Californians the opportunity to vote on the bipartisan reform plan that our highest elected state official believes is necessary to begin to address the public pension crisis," wrote Walters and Senate GOP leader Bob Huff of Diamond Bar.
Brown said he isn't frustrated by the lack of progress in the Legislature, saying serious negotiations don't happen until June, when the annual budget is debated.
"I keep pushing it," Brown told reporters earlier in the week.
Four bills introduced by Republicans would enact the governor's 12-point pension reform, although no hearings have been set for them. They include:
— SCA18 and ACA22, which would establish a hybrid pension plan for new hires, among other changes.
— SB1176 and AB2224, which would stop employees from purchasing credits to inflate their pensions.
Individual Republicans also have introduced several of their own reform efforts.
Assemblyman Cameron Smyth, R-Santa Clarita, has AB1649 and AB1681, which would require public employees to forfeit retirement benefits earned if they commit a felony. His office said his bills could be heard by the Assembly Committee on Public Employees, Retirement and Social Security as early as April 26.
And SCA13 by Sen. Anthony Cannella, R-Ceres, would make sweeping changes for new employees, such as banning retroactive pension increases, limiting benefits and requiring contributions to retirement health care. The bill is not expected to get a hearing.