Pension Issues

August 2015 Update

New State-wide Initiative is an All Out Attack on Public Pensions!

By Mike DeBord

The new State-wide “initiative” (that will soon be circulating around the State gathering petition signatures) will try and close every single State and local government defined benefit retirement plan to new employees! The initiative, titled “Public Employees. Pension and Retiree Healthcare Benefits” would apply to all cities and counties, school districts, special districts, boards, commissions, universities and State government. If the proponents of this initiative get sufficient signatures, it will be on the November 8, 2016 General Election ballot as an amendment to the State Constitution.

The proponents of this initiative submitted their proposal to the State Attorney General who is responsible for writing the “Title and Summary” for all initiatives submitted. The Attorney General says in their Summary of this initiative, that the proposal would

  • eliminate Constitutional protections for vested pension and retiree healthcare benefits for current employees, including those working in K-12 schools, higher education, hospitals, and police protection, for future work performed.
  • add initiative and referendum powers to the Constitution (so voters could be responsible) for determining public employee compensation and retirement benefits.
  • would bar government employers from enrolling new employees in “defined benefit” plans, or paying more than one-half cost of new employee’s retirement benefits, or enhancing retirement benefits, unless specifically approved by the voters.

This initiative would require thousands of new ballot measures at taxpayer cost and close defined benefit retirement plans to new employees even though they have the lowest fees and highest investment returns compared to other types of plans such as 401(k)’s.

This Initiative is the most serious threat to public pensions ever put forth in California! It creates very burdensome and expensive barriers for local government to continue pensions for their new employees. It also affects existing workers and can affect current retirees as existing retirement plans are closed to new employees.

We need your help to try and defeat this initiative which would undermine all public sector workers, including teachers, nurses, police and firefighters. Please don’t be fooled by the proponents, and their deep pocket supporters, who use the media very effectively to put out their propaganda. Tell your family and friends not to sign the petition for this destructive Initiative!

We will be providing future updates and additional information. Thank You For Your Help!

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June 2015 Update

On June 5, 2015, former San Jose mayor Chuck Reed and ex-San Diego councilmember Carl DeMaio along with 4 others submitted to the California Attorney General a state-wide initiative that would seriously undermine public pensions. They requested a title and summary be prepared by the Attorney General to allow them to start collecting petition signatures from the public to qualify it for the November 2016 general election. Chuck Reed and others had tried to undermine public pensions systems in California in 2014 through the initiative process, but the proponents cancelled that effort after the Attorney General wrote the title and summary that frankly described the proposal. The proponents sued the Attorney General over the title and summary language but the judge did not find any inaccuracy in what the Attorney General wrote.

The new initiative has gone through the 30 day public review period, and the fiscal impacts are being written jointly by the State Department of Finance and the Legislative Analyst, and the title and summary are being written by the Attorney General’s Office. The current Initiative #15-0033 has far reaching impacts and could effectively close all State and local public pensions systems to new employees if the voters for the more than 5,000 state entities (e.g. cities, counties, schools, state government, etc.) don’t specifically approve their continuation through individual ballot measures. Stay tuned for updates on this drastic effort, specifically targeting defined benefit retirement plans.