LOS ANGELES– Assembly Speaker John A. Pérez (D-Los Angeles) joined Governor Jerry Brown, Senate President pro Tem Darrell Steinberg (D-Sacramento), and Assemblymembers Michael Allen (D-Sonoma County), Warren Furutani (D-South Los Angeles County), and Cameron Smyth (R-Santa Clarita) today as the Governor signed comprehensive Pension Reform into law. The bill, AB 340, was passed by the Legislature on a bipartisan vote on Friday, August 31, 2012, and was the culmination of months of deliberation by the Assembly-Senate Conference Committee on Public Employee Pensions.
“I am very proud of my colleagues for their hard work to achieve these historic, bipartisan reforms,” said Speaker John A. Pérez. “The pension reform law outlaws the most objectionable practices, creates new accountability for pensions and saves state and local government as much as $80 billion in the coming years, while keeping faith with California’s hardworking public servants. These are meaningful reforms that address one of the biggest long-term challenges facing California, and I believe this is a major victory for the people of our state.”
AB 340 contains sweeping changes to California’s public pension systems, including:
• Outlawing objectionable practices like spiking and double-dipping, which artificially inflate the value of a pension
• Imposing a benefits cap of $110,000 independent of the final salary of the employee to ensure taxpayers are not funding lavish pensions
• Raising the retirement age for employees
• Raising the employee contribution level towards their retirement
• Giving local governments the flexibility to negotiate further cost-savings measures
• Generating savings to state and local pension systems of up to $80 billion over the next 30 years
The measure was negotiated by members of both Houses of the Legislature, and from both parties, based off the reform proposal unveiled by the Governor at the beginning of the year. The Conference Committee held numerous hearings, both in Sacramento and throughout the state.
Local governments responded enthusiastically to the package, with the California League of Cities calling the pension reform bill “historic” and the California State Association of Counties stating that the measure was “meaningful and significant.” In addition, the credit rating agency Moody’s called the reform legislation “a positive step” for state and local governments.
“Passing thoughtful, meaningful reforms on an issue as complex as public pensions is never easy,” said Assemblymember Michael Allen, Chair of the Committee on Public Employees, Retirement and Social Security. “And I have been proud to work with the Governor and Republican colleagues to help bring about comprehensive pension reform for California’s taxpayers.”
AB 340 was authored by Assemblymember Warren Furutani, who co-chaired the Assembly-Senate Conference Committee on Public Employee Pensions. The measure passed with an overwhelmingly bipartisan vote of 66-9 in the State Assembly and by 38-1 in the State Senate.
The following link is an audio file of Speaker Pérez’s remarks at today’s news conference (3:51)
The following link is an audio file of Speaker Pérez saying the legislation he signed today will eliminate some of the worst pension abuses in the state (:22)
The following link is an audio file of Speaker Pérez saying the pension reform law signed today is already improving California’s economic standing (:13)