be secondary or marginalized. Big money can put measures directly on the ballot to get voters response without considering the legislature. Voters, by means of local initiated actions, in two large California cities used the ballot to go after pension costs. More will be said about this below. In February 2013, the California Legislative Analyst Office noted problems in the California State Teachers Retirement System (CalSTRS) similar to CalPERS and raised concerns over future initiative proposals reforming pensions.7 California Pension Reform organization wants the 2014 ballot to have measures that increase employee pension contributions, ending spiking and retroactive benefit increases and move towards a defined contribution 401(k) style plan versus the existing defined benefit retirements guaranteed by employers. In short, the measures move towards a two-tier system. Both voter initiatives and ballot measures all reflect the unfunded costs of pension shortfall. A report released by the Stanford Institute for Economic Policy Research concluded the state’s pension systems have over $500 billion shortfall in 2012 up 17 percent than in 2010. The report notes that the cost to the state of “annual delaying pension solutions is $3.4 million per day.”8 Defined Contribution (DC) plans are found in the private sector, public employee pensions are mostly Defined Benefit (DB) plans. As indicated, Defined Benefit plans offer guaranteed benefits as a percentage of salary at retirement age. Voter created CalPERS pension system in 1932 for state employees and is the nation’s largest public employee retirement plan. It expanded to include city and county governments, school staffs (excluding teachers), legislators, and judges. The total
be secondary or marginalized. Big money can put measures directly on the ballot to get voters response without considering the legislature. Voters, by means of local initiated actions, in two large California cities used the ballot to go after pension costs. More will be said about this below. In February 2013, the California Legislative Analyst Office noted problems in the California State Teachers Retirement System (CalSTRS) similar to CalPERS and raised concerns over future initiative proposals reforming pensions.7 California Pension Reform organization wants the 2014 ballot to have measures that increase employee pension contributions, ending spiking and retroactive benefit increases and move towards a defined contribution 401(k) style plan versus the existing defined benefit retirements guaranteed by employers. In short, the measures move towards a two-tier system. Both voter initiatives and ballot measures all reflect the unfunded costs of pension shortfall. A report released by the Stanford Institute for Economic Policy Research concluded the state’s pension systems have over $500 billion shortfall in 2012 up 17 percent than in 2010. The report notes that the “annual cost to the state of delaying pension solutions is $3.4 million per day.”8 Defined Contribution (DC) plans are found in the private sector, public employee pensions are mostly Defined Benefit (DB) plans. As indicated, Defined Benefit plans offer guaranteed benefits as a percentage of salary at retirement age. Voter created CalPERS pension system in 1932 for state employees and is the nation’s largest public employee retirement plan. It expanded to include city and county governments, school staffs (excluding teachers), legislators, and judges. The total
State%20Legislative%20Battle%20Over%20Public%20Pensions.docx