California struggles with state pension reform

California state lawmakers had hoped to reach a deal raising the retirement age from 55 to 67 for non-public-safety workers, but that legislation may be hung up over the summer break, according to the Los Angeles Times.

As part of Gov. Jerry Brown's wave of cost-cutting changes to the still-embattled state, a legislative panel had considered upping the retirement age, though workers could still retire early and receive less benefits.

"We're looking at how to stretch it so the impact will be an incentive to go to 67, but if people want to retire early, they can retire early with a minimum of hurt," Assemblyman Warren Furutani, co-chair of the panel, told the Times.

One of the issues holding back adoption is a hybrid plan somewhat different than Brown's proposal, a mix of 401(k)-styled benefits and a traditional defined benefits plan.

Panel members are hoping to limit the defined benefit portion to less than $100,000 and substitute a cash-balance plan requiring more employee contributions and a lower guaranteed rate of return in the future, as there has been considerable public outcry about the number of employees earning more than $100,000 in yearly pensions.


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