Sunday, April 25, 2010

Senate Bill 919: Overhauling State Pensions

"Schwarzenegger called public pensions "the single biggest threat" to California's future and cited a recent Stanford study commissioned by the Governor's Office that found California's unfunded pension promises total $500 billion." Read more:

State Senate bill 919 would affect pension reduction for new workers: 1) pension age would adjust upward from 62 to 65, 2) pension income for police, safety officers and firefighters would be reduced from 3% to 2.7% still based on their highest paid year, 3) health benefit vesting would require 25 years of service, rather than the current 20.

In its current form Senate Bill 919 would trim an estimated $110 billion from the State budget over 30 years. During this recession making these employee pension adjustments could be easier for State legislators. The proposed adjustments may not go far enough by federal social security and private employment standards, but if this Bill passes and is realized in its approximately current form it should solve about 20% of the State's structural long-term pension obligation problem.

Posted by Kathy Meeh

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