California Governor Jerry Brown Thursday introduced a series of pension reform proposals, as the California State Teachers Retirement System reported a jump in unfunded liabilities.
Brown's 12-point agenda includes seven proposals designed to end abuses or tighten pension rules. For example, Brown proposes to prohibit retroactive pension increases and pension spiking – the practice of inflating final year salaries with bonuses and other perks.
Brown said in a statement that he’s developing five more sweeping proposals. Those include imposing a pension benefit cap.
Brown laid out his proposals two days after budget talks broke down. GOP lawmakers had wanted their own pension changes – in exchange for their support of placing tax hike extensions on a June ballot.
Brown now says he’ll move forward on his pension reform “with or without Republican support.”
Meanwhile, the California State Teachers Retirement System projected that it now has $56 billion less than it needs to cover the benefits promised to its 850,000 members and their families over the next 30 years. That means the pension system is funded at 71%. Experts say funding should not fall below 80%.
The report will trigger a transfer of more than $100 million from the already deficit-ridden state general fund in the fiscal year that starts July 1.
KPCC wires contributed to this report