A summary of what a few states around the country are doing to reduce the cost of employee benefits:
New Jersey: A new law suspends cost-of-living increases on pensions, raises retirement age to 65 for new hires, requires the state to start making its annual payment to the pension system, requires public workers to pay a portion of their health care premiums based on income, allows collective bargaining over health care to resume in four years.
California: Former Gov. Arnold Schwarzenegger, a Republican, succeeded last year in starting to roll back higher state employee pension benefits, negotiating with unions for higher pension contributions and raising the retirement age. But he had limited success in getting labor unions to contribute more to their retiree health care. Democratic Gov. Jerry Brown continued to work out similar agreements with remaining unions without contracts, but negotiations for further changes have stalled so far this year.
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New York: Democratic Gov. Andrew Cuomo has proposed raising the retirement age, requiring employees to work longer before qualifying for a pension and contributing more toward their pension plans, and capping pensions for the highest paid employees. He recently won rare concessions from one of the state's largest labor unions last week. Under the deal, employees will pay 2 percent or 6 percent more toward their health care premiums. If the remaining public workers unions adopt the same terms, the deal could save $165 million a year and $3.8 billion over five years compared to the previous deal.
Michigan: Republican Gov. Rick Snyder is backing legislation to require all public employees to pay 20 percent of their health care premiums. Snyder has also signed into law measures freezing pay and benefits, eliminating automatic pay increases, and taxing for the first time the pensions of workers born after 1945.
Ohio: Gov. John Kasich passed a law that bans public employee strikes and restricts collective bargaining rights, and forces all public workers to pay at least 15 percent of their health care costs. Other proposals to decrease cost-of-living increases for current and future retirees are being considered by the Legislature.
Wisconsin: Gov. Scott Walker's plan requires employees to increase their pension contributions and asks them to pay 12 percent of their health insurance costs, as well as increasing the time before qualifying for a pension for new hires.
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