California Governor Jerry Brown is proposing a sweeping overhaul of the state’s crumbling pension system. The plan includes a sharp increase in the retirement age and a hybrid 401k-style system.
Brown’s proposal would eliminate abuses like pension spiking and double-dipping. It would require equal retirement contributions from employees and employers. It would make future non-public safety employees work until the social security retirement age of 67. And it would create a “hybrid” pension formula that would combine the current guaranteed-benefit plan with a 401k-style plan.
“Applying this is gonna take some care,” Brown said. ”But I’ve laid out what I think is a minimum that every plan in California ought to meet. And the minimum protects the taxpayer while being fair to the employees.”
Brown wants state lawmakers to pass his plan, then place it on the November 2012 ballot. That will need a two-thirds vote – with support from both Democrats and Republicans.