Two New Pension Reform Proposals Attack New Hires and Cut Pay

Former San Jose Mayor Chuck Reed is at it again, this time proposing two new, poorly-crafted measures that attack state employee retirement securities.

The first measure eliminates defined benefit retirement for new public employees hired after January 1, 2015 and does not require employers to provide new employees with any retirement at all. If an employee moves from one department to another, they will lose their pension. This measure is highly detrimental to recruitment, and morale is certain to be damaged in the process.

The second measure caps retirement and cuts pay. It caps retirement contributions at levels which will force new public employees to suffer pay cuts between 7 – 39%. It will also significantly limit employer contributions towards retirement for new employees. New state employees would have their salaries reduced by up to 22%. Every new public employee would experience a drastic pay cut under this initiative.

These new proposals skirt around the pension reform issue by affecting only new hires and future employees. They do not alter costs of retirement benefits for current employees.

Reed said in a conference call to the media, “We are trying to focus on controlling the cost of benefits. The problem is only going to get worse.”

Dave Low, leader of a union-supported group called Californians for Retirement Security, countered by saying in a news statement that the proposals are poorly-drafted, mean-spirited and as unworkable as Reed & DeMaio’s past two pension reform ballot measures. ACSS is also a member of Californians for Retirement Security and supports Low’s statements.

Within the next two months, Kamala Harris will issue titles and summaries to these proposals, and we may see them on the 2016 November ballot if they collect enough signatures in time.

Click here to read the full article in the SacBee.

Click here to read Dave Low’s talking points summary about these measures.