Dave Low: Reed's state pension reform measure would be financial disaster

August 26, 2015

By Dave Low

Backers of an effort to slash the retirement of public servants got a stiff dose of reality this month when leaders of the state's top public investment funds raised red flags about the plan that could be headed for the 2016 ballot.

They said the latest proposal on public pensions from former San Diego Councilman Carl DeMaio and former San Jose Mayor Chuck Reed would undermine decades of labor law and collective bargaining precedent and threaten retirement security for tens of thousands of working families.

It would make it nearly impossible for the funds to provide defined benefit pensions to public workers and would jeopardize the solvency of the systems themselves.

CalPERS CEO Anne Stausboll said the measure was riddled with vague language, making it likely to wind up tangled in the courts for years and creating confusion for local governments and for families. She said it could be interpreted as violating pension promises to current employees, might threaten CalPERS' federal tax-exempt status and will create chaos by forcing employers to close their defined benefit programs to employees hired after 2018.

Read the full op-ed from the San Jose Mercury News here.