The California Assembly and Senate on Friday will vote on a state pension reform bill after it received quick approval from a joint legislative committee.
The committee approved the legislation on Tuesday, the same day as the introduction of the bill that came from a compromise plan hammered out between Democratic legislators and Gov. Edmund G. Brown Jr.
The plan, which requires new and existing state workers to contribute more toward their pensions, doesn’t include a hybrid pension plan that Mr. Brown had sought.
At a special meeting Wednesday of the board of the $238.4 billion California Public Employees’ Retirement System, Alan Milligan, chief actuary for CalPERS, estimated that savings would be between $40 billion and $60 billion over 30 years to the state and various counties, municipalities and school districts that pay into the CalPERS system because of the reform package.
Mr. Milligan said the pension changes would not have a major effect on CalPERS’ unfunded liability. The pension system is 81% funded.
Earlier Tuesday, Mr. Brown said in a Los Angeles news briefing that the compromise plan would cap salaries used to calculate defined pension benefits for new employees covered by Sacramento-based CalPERS at $110,000 and a $130,000 salary cap for most new participants in the $152.1 billion California State Teachers’ Retirement System, West Sacramento. Mr. Brown offered no cost analysis.
The bill also would raise the retirement age for new employees.
In a statement late Tuesday, CalPERS Board President Rob Feckner praised some of the changes in the reform plan, saying it would “go a long way to ensure sustainability of the retirement fund, reduce abuse and add protections, ease administration, and reduce pension costs over time.”
Mr. Feckner did not address the cap on salaries.
Republican legislators have said the plan does not go far enough, but Democratic lawmakers, who have majorities in both legislative chambers, can pass the reform package without any Republican votes.
The pension package must be approved by Friday, the last day of the 2011-2012 legislative session, if it is to be enacted this year.