Chuck Reed announced a new strategy to attack pensions in California today. The text of new proposal has several features designed to take away employees retirement benefits.
It would abolish pensions for employees hired after January 1, 2019 and replace them with a "defined-contribution" system unless changes to benefits are approved in an election. In a defined-contribution system, employees have to pay in a fixed amount with no guarantee of what their retirement income would be. As a result, this approach shifts the risk and could result in thousands of public employees unable to retire.
The proposal is not limited to retirement benefits. It provides, "Voters have the right to use the power of initiative or referendum... to determine the amount of and manner in which compensation and retirement benefits are provided to employees of a government employer." As a result, the measure could be read to allow voter initiatives to eliminate or change MOUs, severely limiting collective bargaining in California.
The proposal also seeks to prevent the Public Employment Relations Board from hearing unfair practice cases involving ballot measures to strip employees of bargained-for compensation.