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SALINAS, Calif.- Talks about pension overhaul swirling in Sacramento, are now becoming a reality. On Tuesday, Governor Jerry Brown announced his plan to change the public employee retirement system in California, known as CalPERS. We decided to find out what this could mean for local governments. CalPERS has really become a dirty word in the last few years. That's something the Governor Jerry Brown is trying to change with his new plan.
Looking to the CalPERS buck, used to show the shared investment into pension plans, the average contribution by CalPERS investment earnings is 64 cents. Employers like city governments, put in 21 cents on average and employees are putting in about 15 cents.
If it's approved, public employees will be required to pay at least 50 percent of their pensions. Benefits according to your salary would be capped at around $110,000 dollars, even if the employee makes more. The retirement age for all new employees would increase by two years. The retirement age will go up for current employees as well. For fire and police would go from 50 to 57 and for other employees the retirement age could go as high as 67.
Brown said these changes will ensure the public retirement system will be around for generations to come. Public employees will also get the chance to decide if they want to increase the amount they contribute. He said these changes should also keep public employees from trying to abuse the system for better payouts. Some local city leaders said they still need more information.
"So we've gotta get the details. We've gotta vet them with our budget get the specifics. But there's no question, everyone ought to be encouraged that this begins to move things in the right direction," said Salinas Mayor Dennis Donohue.
Brown said the plan also gets rid of some of the loopholes and extra pay employees are getting. For example, it limits the chance for public employees to work after they retire. This is the big double dipping issue we've been telling you about. State lawmakers will discuss the plan this week and depending on the changes voters may get to decide on it down the line.
