How California Pension Plans Could Be Improved
A plan to increase the retirement savings of California’s public employees is one of the few options to keep the state’s finances afloat after the economic downturn.
It would require state employees to pay a larger share of their salaries than they are now, but would require them to make more contributions to their pension plans.
California has long struggled with the costs of its pension systems, which have become so heavily dependent on payroll taxes and other sources of revenue that the state has run out of money to cover all the needs of its workers.
The plan would also raise the state pension age to 67, a change that would require the state to cut millions in pension benefits over time.
Proponents say it would help California reduce its financial burdens and boost the state budget.
A spokesman for the pension fund said the plan would help raise revenues and boost California’s finances.
It would be a massive expansion of benefits in California, said Kevin Kohn, a spokesman for California’s Public Employees Retirement System, which oversees the state pensions.
We’re not making the investment that would bring in additional revenue.
We’re taking the money that was being taken from other sources, including state and local government, and we’re bringing that into our pension fund.
In the last year, the state government has cut $1.2 billion from its pension system, the largest single reduction in any state in at least 40 years, Kohn said.
“California pension funds are currently facing an unprecedented funding shortfall,” Kohn added.
This plan is the latest in a series of proposals aimed at improving the state-funded retirement systems of California public employees.
Pension experts say the new plan could boost the finances of California, which has the third-highest pension costs in the country.
Under the proposal, which would be in place for at least the next 10 years, the average retirement age would rise to 67 from 62.
It is estimated that in 2021, the typical California public employee would have to make a higher pension contribution than the average California worker, an increase that would cause the state as a whole to lose money.
Proponents also argue that it would make California more competitive with other states in the nation.
Its plan would allow public employees to retire at a younger age, which is expected to save the state money.
But critics, including California’s governor, have said the changes will hurt the state.
If the plan were to become law, it would require all state employees working in the public sector to contribute at least $25,000 to their pensions.
The money would then be used to pay the full cost of the pension, according to Kohn.
For now, the plan has not been formally introduced, but the California legislature is expected on Thursday to begin considering it.
Kohn said he expects the legislature will vote on the plan in December.
Critics of the plan say it will only hurt public employees by requiring them to contribute more money, and that it will make it harder for them to keep their jobs.
State employees make up a third of California workers.
In a report this year, a group of union-affiliated groups said the reforms would put the state at a competitive disadvantage with other regions.
There is some evidence that higher retirement ages for public workers could help raise their incomes and reduce the need for pensions, said Karen Stoltz, a senior fellow at the liberal Center on Budget and Policy Priorities.
Currently, California has the highest median annual income for all workers in the United States, according the Center for American Progress.
The report also found that a one-time tax increase of $2,000 on those earning more than $75,000 per year would raise $15 billion in additional state revenue over the next decade.
Another proposal would raise the retirement age to 65 from 60, and reduce contributions to the pension plans to 25 percent from the current 15 percent, said Kohn of the California Public Employees’ Retirement System.
Even though California has a relatively low share of its public workers working in higher paying jobs, it still ranks as the top state for pension costs.
Last year, public employee pensions for the average state employee were about $1,100, compared with $1-1.10 for the nation, according a study by the nonprofit Retirement Research Council.