Governor Brown’s plan to address pension costs has created a scenario where employees will be placed in an us-versus-them environment as new hires will pay for pension benefits they won’t qualify for. The only other option is to allow pension costs to rise to unsustainable levels for employees in the old system.

The way that the previous 2.7@55 pension formula worked, employees enrolled would have to pay the difference between regular pensions and the enhanced benefits offered by the county. When enrollment was open and ongoing, that cost could be reasonably divided among all employees for 20 years. But now that the state has capped benefits and the 2.7 percent program is closed, a limited number of employees are left to fund the pensions.

That could cause employees to contribute as much as 20 percent of their pay towards their pension, a level that is unaffordable for employees.

Instead, new employees are contributing, in part, to the pensions granted under the older formula. This year’s rate will 2.46 percent, in addition to contributions they will make toward their own pension formula.

Read the full article at the OC Register.