“California’s pension system is putting a tremendous strain on the state budget and simply cannot be sustained over the long term,” Mayor Swearengin said. “The City of Fresno and communities throughout the state are feeling the impact of California’s budget crunch every day. Our state government leaders owe it to the taxpayers to pass meaningful reform to the state’s pension system.”
The governor’s proposal includes four elements:
- Create a second, lower tier of pension benefits for new hires;
- Create a permanent additional five percent increase in employee pre-tax contribution toward retirement benefits;
- Calculate the retirement rate based on the highest three years of wages during employment instead of the highest single year; and,
- Require CalPERS’ chief actuary to submit a report to the Legislature describing how contributions could change if a lower investment return was assumed and the impact on future state budgets if CalPERS fails to achieve its assumed investment return, and have that report evaluated by a qualified third party.