Hill to Hold NEWS Conference To Announce Bill Capping Pensions For All Public Employees in California

AB 89 Closes Loophole Used by Tax-Exempt Institutions Like the University of California

What:

Assemblyman Jerry Hill will announce legislation that would cap pensions for all public employees in California who make more than $245,000 a year.   Assembly Bill 89 would close a loophole that allows tax-exempt institutions like the University of California to award pension benefits to public employees above the federal limit.

 

When: Friday, January 7, 2011 at 11:30 a.m.

Where:505 Van Ness Avenue, San Francisco, CA 94102

Front steps of the Hiram W. Johnson State Office Building

Contact:Aurelio Rojas, communication director for Assemblyman Jerry Hill, 916-747-3199 cell or 916-319-2019 office

BACKGROUND

In 2007, the UC was granted an exemption by the Internal Revenue Service, which removed the $245,000 federal cap used to limit retirement benefits for public employees. The federal  cap limits an employee’s pension calculation to the employee’s highest average salary over a three-year period up to $245,000, which means an annual pension of roughly $183,000. Without the cap, pension payments could reach more than $300,000 a year.

Hill, whose office is working to determine how many other public employees in California work for government entities that have obtained similar waivers from the IRS said “the last thing California needs at a time when public entities are grappling with budget deficits is increasing benefits for employees making more than $245,000.”

According to the San Francisco Chronicle, increased pension payments to top UC executives under the federal waiver will cost $5.5 million a year --- plus an additional $51 million to make the increases retroactive to 2007 when the cap was authorized to be removed.

Hill noted  that all UC employees have been forced to take cuts in their compensation packages as the university deals with $21.6 billion in underfunded pension obligations. The UC Board of Regents also recently increased student tuition 8 percent on top of last year’s 32 percent increase, which means tuition costs have tripled during the last decade.

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Nate Solov

Office of Assemblymember Jerry Hill

916-319-2019

www.asm.ca.gov/hill


Posted by Steve Sinai