Wednesday, June 06, 2012

California cities vote to cut pensions for public employees, not clear if this affects current retirees

NBC Nightly News today (June 6) reported on the actions of voters in California to roll back pensions for public workers in San Jose, San Diego, and other cities.  It was not clear from the report if this action could cut pensions of existing retirees already receiving benefits, or "merely" require public workers to pay more for their own future benefits (moving them toward the "defined contribution" area). However, comments by at least one San Jose firefighter seem to suggest that it could affect current retirees.

NBC also reported on the bankruptcy of Central Falls, RI and the implementation of cuts in nearby Providence.

Actually, an editorial in the June 7 Wall Street Journal (paywall link), p. A18, reports that in San Diego the measure affected "only" new hires, shifting them to defined contribution plans, whereas in San Jose, existing workers get cuts in future pension credits or must pay up to 16% of their income.  Does that mean existing retirees are still unaffected?

The narrow avoidance of recall in Wisconsin by Republican Governor Scott Walker may embolden other states to try to cut benefits.

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