LOS ANGELES (CBS) — Gov. Jerry Brown has unveiled a new pension plan for state workers, which will raise the retirement age to 67 for new hires.
The proposal would create a mandatory hybrid retirement system that would include some guaranteed benefits, but also a 401K-style plan that would be subject to the stock market and other investments.
It would also ban employees from spiking their compensation by piling up overtime and other benefits as they near retirement.
A union-funded pension reform group says the plan targets state workers.
“This is not a growing problem with pensions. It’s a growing problem of our economy failing and the pension programs not being as solvent as they were,” Steve Maviglio of Let’s Talk Pensions told CBS2. “So you’re actually taking a baseball bat to swat middle class Californians who put a lot of money back into our economy.”
The proposed changes would impact all 1.6 million state, county and municipal employees who are part of the CalPERS system.
The plan would not affect employees with the CHP, LAPD, and fire departments across the state.
Experts say California’s pension demands are so strong that they could soon sink the budget.
To review the full plan, click here.