A day after Governor Jerry Brown signed the state’s pension reform package, Senate Republicans are calling for additional cuts.
“California is spending $6.6 billion this fiscal year on benefits, and that’s up from $2.7 billion just a decade ago,” says Bob Huff, Senate Repblican leader. “There was pension reform, and that’s good, but we only got about half of what the Governor was setting out to do at the beginning of the year, and we don’t get the savings that we need to take the pressure of the budget.”
The bill signed by Brown limits pension spiking and requires employees to pay more money into their retirement plan. CalPERS estimates the fund will save between $42 billion and $55 billion over 30 years while CalSTRS says its savings will be $22.7 billion over 30 years. The state has an estimated $160 billion in unfunded pension liabilities over those 30 years.
One of the early proposals by the Governor was to transition to a 401K style hybrid plan.
Senator Huff adds that there are no constitutional guarantees with the new package, so the reforms could be reversed at any time by a vote of Legislature. Click here to read an earlier story about the pension reform legislation.
