Gov. Jerry Brown says he will be proposing specific reforms to California’s pension system.
The Democratic governor’s announcement during a conference in Los Angeles last week follows the formation of a new legislative committee that will examine public pensions.
“In my mind there is no question that we need significant reforms throughout the whole pension system and I will be proposing those,” Brown said.
He did not give any specifics about the potential reforms or their timing.
The committee will hold three separate hearings over the next several weeks in Los Angeles, the San Francisco Bay area and in Sacramento. The first hearing will be held in Carson on Oct. 26, while the others have not yet been finalized.
Pension reform was a big sticking point during Brown’s failed budget negotiations with Republicans this year. Many unions, which generally back the majority Democrats in the state Legislature, have opposed major pension overhauls.
Moody’s Investors Service lead California analyst Emily Raimes said it would generally be a credit positive if any pension reform lowers the state’s total unfunded liability.
In February, California’s independent Little Hoover Commission urged state leaders to take on government employee pension reform.
The report urged the governor and Legislature to establish the legal authority for state and local governments to freeze pension benefits for current workers. Benefits earned for service before the freeze date would remain vested, but going forward, those workers should accrue benefits under less costly retirement formulas, the report said. Payments to current retirees would not be affected.
