CalPERS has condemned a proposal by five California mayors who want to let local governments change retirement benefits for current public workers.
“The courts have clearly established that California public employees have a vested right to the level of benefits promised to them when they are first employed,” said a statement by the $272.7 billion California Public Employees’ Retirement System, Sacramento. If the ballot measure passes, “then all contractual rights in California could be in jeopardy.”
Pension and health-care benefits the employees already have earned would not be altered, the mayors of San Jose, San Bernardino, Santa Ana, Anaheim and Pacific Grove said Tuesday. The effort needs more than 807,000 petition signers to qualify.
“Many of California’s public employee retirement plans are simply unsustainable and it’s in everyone’s interest to provide the tools to fix the problem now before even tougher actions are necessary,” San Jose Mayor Chuck Reed said in a statement.
Dave Low, chairman of the labor-backed Californians for Retirement Security, said in a statement that the proposal “breaks the promise of a secure retirement made to millions of Californians …”
“It will allow public employers to unilaterally cut the retirement benefits promised to current teachers, firefighters, police officers and school bus drivers,” said Mr. Low, whose organization represents more than 1.6 million current and former public workers.
The mayors aim to put the initiative on the November 2014 ballot, when voters will select the governor and members of the U.S. Congress.
Voters in San Jose, California’s third-largest city, approved a ballot initiative in June 2012 allowing current employees to pay more to keep their existing retirement plan or switch to a more modest plan, while steering new employees into a lower-cost plan. Unions challenged the measure in court.