California Assembly member Luis A. Alejo (D-Watsonville) has introduced a bill (AB 160) that would exempt tens of thousands of public workers from a new law that reforms the state’s public pension system, the Sacramento Bee reports (Ortiz, Sacramento Bee, 1/29).
Background on New Law
In September 2012, Gov. Jerry Brown (D) signed a bill (AB 340) that:
- Requires all current and future public workers at every level of government to pay at least 50% of their pension costs;
- Increases the retirement age by at least two years for future public workers; and
- Caps the amount of future public workers’ salaries that can go toward their pensions at $110,000 for those participating in Social Security and $130,000 for those not participating in the program.
The law applies to most public workers (California Healthline, 9/13/12).
The changes to the pension system took effect Jan. 1.
Details of New Legislation
The measure introduced by Alejo — which was sponsored by the Teamsters and two other unions — would exclude about 20,000 local and regional mass transit employees statewide from paying the higher contributions and receiving reduced retirement benefits under the new law.
The legislation also would exempt workers who participate in “multiemployer pension funds,” which are union-sponsored pension plans regulated by federal standards.
Reaction to Bill
Pension reform advocates say the bill is an attempt by labor unions to undermine the pension law.
Dan Pellissier — president of California Pension Reform — said that if lawmakers approve the bill, “they’re selling out to the unions.”
However, Alejo and the unions sponsoring AB 160 said the measure would make necessary, reasonable and limited changes to the law (Sacramento Bee, 1/29).