Lawmakers charged with overhauling California's state and local public pension law are considering a plan to cap defined benefit pensions that would not include a second 401(k)-style component common in so-called "hybrid" retirement plans.
"There will be a cap," Senate President Pro Tem Darrell Steinberg, D-Sacramento, during a hallway press conference this afternoon with Capitol reporters. "I think what you will see tomorrow, there won't be a hybrid. ... It will just be a cap, for both miscellaneous and public safety workers."
Steinberg wouldn't divulge details such as where the cap would be set, a key figure that will establish how many of California's 2 million-plus public-sector state and local workers fall under the provision. He also cautioned that his comments this afternoon shouldn't be construed as a formal announcement. As of this afternoon, lawmakers were still hammering out specifics and no pension language had been released.
"This is not a deal," Steinberg said, "I'm telling you I'm confident there will be."
When asked how much the plan under consideration would save, Steinberg said, "We don't have an analysis yet." When asked again, he roughly estimated the savings would be in the "tens of billions of dollars" over "20 to 30 years," based on figures from earlier pension legislation work.
CalPERS, which has scheduled a special board meeting on Wednesday in anticipation of the legislation, will analyze the fiscal impact of the reforms in time for the Assembly and Senate floor votes planned on Friday, Steinberg said.
Republicans and pension reform advocates have said that the Democratic-majority Legislature has been dragging its heels on pension reform, seeking to do as little as possible to avoid offending their labor allies while still polishing their collective image as careful fiscal managers.
Democratic Gov. Jerry Brown has said that voters demand pension reform before they'll approve a tax increase measure on the November ballot. Earlier this year he sent bill language for a 12-point reform plan to the Legislature that includes a hybrid pension provision.
Other aspects of Brown's proposal, such as provisions to curb spiking abuses and end additional service credit purchases, will be part of the bill package that will be introduced on Tuesday.
The floors of the Senate and Assembly must vote on the measure on Friday. Any bills that haven't cleared both chambers by then will die.
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