Attacks on Public Employees' Pensions & Benefits
AFSCME is proud to represent over 180,000 state, county and municipal employees and retirees that share a common commitment to public service and who have invested in a sound public retirement system for their financial security. Unfortunately, legislation introduced this year by some legislators sought to needlessly undermine public employees’ hard-earned pensions and benefits. Our members who spend their lives serving the public across the state have already made great sacrifices at the bargaining table for the health and sustainability of California's public pension system.
SB 1149, introduced by Senator Steve Glazer (D-Orinda), would have created a new defined contribution retirement savings account plan and allowed new state employees to opt out of the existing California Public Employees’ Retirement System (CalPERS) defined benefit (DB) pension plan. This bill would have diverted the employee and employer contributions that would otherwise be made on their behalf for the DB plan’s normal cost to a new defined contribution (DC) retirement savings account developed and administered by the state employer’s labor representative.
However, SB 1149 would have shifted 100% of the financial risk to employees, meaning global economic downturns could potentially devastate an employee’s retirement savings. Under the program created by SB 1149 there was no protection or guarantee for retirees against fluctuations or losses in investments. Furthermore, SB 1149 claimed to deposit into an “employer contribution” account the same amount as the state would have contributed for the normal costs of a defined benefit pension. Yet, the normal cost contribution by the employer is substantially less than the total employer contribution. Employees who opted into this deferred compensation program would have received a substantially lower total compensation package compared to employees in the defined benefit plan. SB 1149 did not ensure retirement security for our hardworking public employees.
Thanks to the efforts of AFSCME and the labor community, SB 1149 was defeated in the Senate Public Employment and Retirement Committee on a 1-3 vote. AFSCME will continue to monitor legislation that threatens public employees' pensions and benefits.