The state has not gone far enough in reining in unwieldy pension obligations but state Assembly candidate George Yang has a plan that will distribute the pain not just to new public employees but for those who have already retired or in the system now.
The Legislature just passed pension reform measures endorsed by Gov. Jerry Brown that affects new hires only. The state will not reap the benefits for 10 to 15 years, Yang said.
His plan, introduced at a press conference in Burlingame yesterday, calls for tying retirement benefits to the average median income of all workers in the state based on the unemployment rate.
Yang is running for the District 24 Assembly seat against current Assemblyman Rich Gordon, a Menlo Park Democrat.
Yang, also from Menlo Park, proposes a cap on pensions that will affect all state and municipal employees, whether they have already retired, are about to retire or are currently in the system.
Yang wants to do away with a two-tier system that will only affect the benefits for new public employee hires and put a program in place that will affect all public employees.
He has developed a public employee compensation index that ties salaries to the current unemployment rate to calculate retirement benefits. He wants to link a new employee’s retirement age to the state’s current life expectancy, excluding public safety employees.
He also wants to link the performance of the California Pension Employees Retirement System to member payments to give public employees greater incentive to pick a CalPERS board member who has the know-how to invest the pension funds.
Currently, he said, investors are playing fast and loose with what he calls "other people’s money.”
The state, he said, has an unfunded pension liability approaching $300 billion that will eventually hurt local government the most.
A city manager, for instance, should not retire with a $250,000 annual retirement package, he said.
While the Legislature recently passed a pension reform measure, many Democrats in office said much more needs to be done to rein in the costs, including Gordon.
The state got in this mess because lawmakers made mistakes in the past when revenue was high, Gordon told the Daily Journal in August after he voted for Assembly Bill 340.
"We made decisions based on assumptions that revenue was continually growing,” Gordon told the Daily Journal then.
The state’s current pension obligations are off the chart, he said.
"We’ve moved the curve. Some will say not enough and others will say too much but the important thing is that we moved the curve,” Gordon said in August. "And we are not done.”
For his part, Yang told the Daily Journal at yesterday’s press conference that he is not a union buster.
"I’m a union household,” he said.
His wife is a public employee.
A pension cap will immediately reduce unfunded pension liabilities not just for the state but also for all cities and counties as well as other public agencies, Yang said.
He also has a plan to tie salaries and pensions to the current state of the economy, whether it is a "boom” year or a "lean” year, he said.
The system in place now, he said, causes cities to lay off workers so that some employees can hold on to their hefty retirement packages.
His plan, he said, will protect union jobs by requiring across-the-board cuts for all public employees in lean years.
To learn more about Yang visitwww.gcyang.com.
Bill Silverfarb can be reached by email: email@example.com or by phone: (650) 344-5200 ext. 106.