California Governor Signs Pension Overhaul Legislation
California Governor Jerry Brown has signed legislation that he called the biggest rollback to public pension benefits in the state’s history.
Governor Brown says the changes in the state’s pension system will save taxpayers billions of dollars in the future. The legislation will increase the retirement age for new public employees and require them to pay at least half of their pension costs. It also caps the salary amount that can go toward pensions.
Brown praised lawmakers on both sides of the aisle when signing the legislation in Los Angeles. He called the bills “hard fought”. The legislation falls short of Brown’s 12-point proposal. That had included a 401k-style plan so public employees would bear some of the investment risk.
The changes affect most local governments which participate in the state's pension programs. Unions called the legislation a giant step backward for retirement security.