This week, voters in two California cities approved separate but equally drastic reductions in public employees’ pension plans designed to reign in city budgets. In San Diego, city worker’s salaries are to be frozen for six years and new hires will be switched to a 401(k) plan. San Jose’s current employees are being asked to increase their pension contributions or accept reduced benefits.
Spurred on by their success, Los Angeles Mayor Antonio Villaraigosa has stepped up his call to city officials to speed up his own pension reduction plan. Key elements include raising the retirement age by 12 years – from 55 to 67 – and increasing employee contributions. Pension costs make up a large part of the city’s $7.2 billion budget, and Villaraigosa sees those costs increasing in future.
Meanwhile, Governor Jerry Brown, who included pension reform for state employees in his 12-point budget proposal, has said he sees the votes as a powerful signal that Californians see pension reform as “an imperative.”
Pierluigi Oliverio , San Jose City Councilman who supported Mayor Chuck Reed's pension reform
Joe Simitian - (D), State Senator, California's 11th District which spans three counties -- Santa Clara, San Mateo and Santa Cruz;