Agency Eyes Revamp of All California Employee Pension Programs

By Staff Report

Mar. 2, 2011

A California commission has recommended a complete revamp of pension programs covering the state’s employees, citing their “crushing” costs to the state and taxpayers.

The Little Hoover Commission, a bipartisan and independent state agency, in late February proposed a new pension model offering a lower-cost—compared with plans now offered—defined benefit plan in conjunction with a 401(k)-style plan in which the state would match employee contributions up to a certain percentage of pay.

Such an arrangement has been in place for federal employees hired since the late 1980s.
The commission also recommended a cap of $80,000 to $90,000 in the amount of salary that can be used to calculate an employee’s pension benefit, a ban on retroactive benefit increases, and setting benefit eligibility ages that do not encourage early retirement.

“The stakes are too high to continue making temporary changes at the margin,” the commission stated.  

Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail


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