Lawmakers reach deal on public employee pension changes

Governor Jerry Brown

Earlier today (Tuesday), Governor Brown and legislative leaders reached agreement on a number of changes to how the state pays pensions to public employees.The pension legislation contains items that have been discussed publically, plus some measures opposed by CFA and other unions.

Thanks to our work pushing back against many attempts to severely limit post-retirement eligibility to return to work, our members’ Faculty Early Retirement Program (FERP) remains intact. Language protects the FERP program, ensuring that faculty are allowed to return to the classroom after retirement.

CFA and other partners also stood firm against regressive attempts to institute a mandatory hybrid 401K/defined benefit program for new employees, which effectively would have ended the defined benefit plan that provides basic retirement security for our members.

Key provisions of the deal include:

  • New employees will be required to pay 50% of normal costs.  For current employees, the employer can bargain to require current employees to pay any portion of the retirement contribution.
  • Provides additional authority to local employers to require employees to pay for a greater share of pension costs through impasse proceedings if they are unsuccessful in achieving the goal of 50-50 cost sharing in 5 years.
  • The retirement age for new misc. employees will be increased to 67 for maximum retirement.
  • The average of the final three years of compensation, regular, recurring pay and limiting post retirement employment to 960 hours will be implemented. This is the “anti-spiking” provision.
  • Pension earnings from felons; a prohibition on retroactive pensions; elimination of pension holidays; and elimination of the ability to purchase service credit for air time.
  • Pensionable salary will be capped at $110,000 for those in Social Security and $130,000 for those not in Social Security.

“CFA understands our current pension system needed reform to rid the practice of unfair “spiking” and other abuses and appreciates the recognition that FERP is a valuable program worth preserving,” said Lillian Taiz.  “However, we believe the measure adopted today goes too far, and will negatively impact many CSU faculty. Basic retirement security should not be used as a pawn in order to score political points.”

Over the past several years, hundreds of thousands of public – and private – workers have been hit with furloughs, pay cuts, and reductions in benefits.  A sound, strong pension system is imperative as we move forward to recruit, train, and retain a world-class workforce in our universities. For more information, read this article from the Sacramento Bee.