California Current Employees Pension Reform Initiative (2014)

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A California Current Employees Pension Reform Initiative may be on the ballot in 2014 for voters in California.

If approved, this measure would amend the California Constitution to define that a public employees vested rights "only applies to pension and retiree healthcare benefits earned for service already rendered." The proposed amendment "explicitly empowers government employers and the voters to amend pension and retiree healthcare benefits for an employee’s future years of service." This would allow city, county, public school and state government entities to change unearned pension benefits for current employees going forward. In other words, if an employee has earned certain benefits, they could not be taken away, but, if the employee has agreed to a certain benefit plan, this benefit plan as it applies to future years of service can be changed.[1][2]

Background

Text of measure

Below is an initial draft of the proposed initiative. This is not necessarily the final language but only a draft.

OBJECTIVE:

In order to protect the government’s ability to: a) provide essential services to the public, and b) maintain retirement plans that are sustainable, fiscally-sound and able to meet the commitments to its employees, this initiative empowers the people of California to take the actions necessary to control the escalating costs of public employee retirement benefits.

INITIATIVE PROVISIONS:

This initiative defines that a government employee’s “vested rights” only applies to pension and retiree healthcare benefits earned for service already rendered, and explicitly empowers government employers and the voters to amend pension and retiree healthcare benefits for an employee’s future years of service.

- These provisions would apply to all future government employees.

- These provisions would apply to all current government employees, unless there is clear and convincing evidence that his/her employer intended to create a vested right to a particular level of retirement benefits for future years of service.

- The initiative would also allow all government employers to temporarily amend its retirement benefits for all employees’ future years of service if: a) they are facing a fiscal emergency or b) their retirement plan is “at-risk” according to the standards established by the federal government for private pension plans. [Note: this provision remains subject to further refinement and discussion]

For any public employee plan that is “at-risk” as defined by federal laws governing private pension plans, the government employer will be required to prospectively modify its employee pension benefits in such a way that will lift the plan out of “at-risk” status within XX years. If such action is not taken within two years, the government employer would be required to…

(Potential Options:

require employees to pay 50% of all pension costs, increase employee and/or employer contributions into the plan by XX, etc.)

Nothing in this initiative affects the retirement benefits that a government employee has earned and accrued for prior years of service. Government employers and/or the voters would be required to wait until current labor contracts expire before adopting any changes to employee retirement benefits.

This initiative prohibits the State of California, CalPERS, and other government boards from interfering with elected leaders’ or voters’ ability to amend their public employee pension plans for employee’ future years of service (this includes prohibiting CalPERS from charging exorbitant termination fees to government employers who wish to amend their pension plans).

This initiative would apply to the State of California and all political subdivisions of the state,including, but not limited to, counties, cities, school districts, special districts, boards,commissions, the University of California, and California State University.[1][3]

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See also

In October, Ballotpedia will release a case study of two local pension reform measures that were approved by voters in San Jose and San Diego in June 2012, featuring exclusive interviews with Mayor Reed, former San Diego Mayor Jerry Sanders, pension reform advocate and Congressional candidate Carl DeMaio, among others. Stay tuned for further details.

Related measures

Statewide

Local

References

  1. 1.0 1.1 California Pension Reform Ballot Initiative Draft
  2. Truthout.org, "California Pension-Cutting Ballot Initiative Revealed," September 29, 2013
  3. Note: This text is quoted verbatim from the original source. Any inconsistencies are attributed to the original source.

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