SACRAMENTO, Calif. (AP) — The bulk of the projected savings in the public pension reform deal announced by Calif. Gov. Jerry Brown won't be felt for decades because most of the proposed changes will affect government workers who have yet to be hired.
While Brown touted his deal as a way to shore up California's retirement systems, the legislative package he announced Tuesday also illustrates the difficulty in addressing runaway pension costs. That's because retirement benefits for current government employees are protected by decades of court decisions.
The governor announced a compromise with Democratic lawmakers after months of negotiations. On Wednesday, the chief actuary of the state's main pension fund — the California Public Employees' Retirement System — estimated the pension plan will save the system $40 billion to $60 billion over 30 years. The fund currently has an estimated $100 billion in unfunded liabilities, according to spokesman Brad Pacheco.
Unlike private-sector retirement plans, which employers can change, court decisions over 60 years have made clear that future pension benefits are guaranteed to current public employees. Last year, for example, the state Supreme Court ruled that implied contracts covering retirees' health care are valid.
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