Wednesday August 23rd 2017

Brown Proposes Pension Plan Reforms

Free News Press – Governor Jerry Brown announce sweeping pension plan reform that is aimed at saving the taxpayer money while protecting those on retirement. His proposal will also affect local and county government employees.

“My plan raises the retirement age and bans abusive practices like ‘spiking’ and ‘air time’ while mandating that public employees pay an equal share of pension costs,” the governor said Thursday when he unveiled his new plan. The goal is to cut the risk to taxpayers and keep the state “solvent”.

One controversial aspect of the program is the increase in the retirement age. His plan would raise the retirement age for new hires from 55 to 67. He noted that the retirement age for public employees in 1932 was 65, but over the years that age has been decreasing.

Brown said that although state employees contribute eight percent of their salary to a pension fund, some local and county employees pay nothing. He said that the cost should be shared by the employee and employer equally. Current employees will have to start paying 50 percent of the annual cost.

Currently some municipalities will guarantee the annual pension benefits for public employees. The new hybrid plan will combine two components to share the risk. Public employees will pay part of their salary into Social Security and part into a pension plan. This will provide a safety net just in case the investments lose value.

The governor’s 12-point plan still needs to be approved by the State Senate and Assembly. “I look forward to working with the legislature to enact these major reforms,” Brown said Thursday.

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