Toward a Balanced Solution for California Public Pensions

By Michael Allen

I would forgive anyone for asking why I, a former labor leader turned State Assemblymember, would become a chief proponent for, and sponsor of, public pension reform.

Prior to my election to the Assembly in 2010, I spent many years representing working men and women and their families. That included a 20-year stint as president of the North Bay Labor Council, where I worked tirelessly to foster a living wage and a dignified retirement for the region’s lower- and middle-income workers.

After being sworn in to the Assembly, I reaffirmed my commitment to those individuals, but I also dedicated myself to representing the broad spectrum of people, organizations and businesses that live and work within the area I am representing.

In an era of fiscal and budgetary limits, my goal from day one was to play a leadership role in discussions and decisions about spending our precious tax dollars, with an eye toward balancing the needs and interests of the people who depend on public programs and services, the workers who provide those programs and services, and everyone who pays for them with their tax dollars.

Accordingly, I have focused on one of the biggest, most complicated issues currently confronting government agencies at all levels: Public pensions.

The problems of affordability, public transparency and accountability have been years in the making, with many contributing factors. But within two months of being sworn into office, I introduced legislation to prevent public employers and employees, such as the University of California system, from deferring pension contributions when the economy was robust. Instead, in good times and bad, they would continue to contribute and maintain a surplus fund in case of an economic downturn.

That bill, along with pension-related proposals by other legislators, was sent to a six-legislator conference committee tasked with crafting a single, coherent reform package. Due to my background as a mediator and a negotiator, I was appointed to the committee in early 2012.

In February, Governor Jerry Brown released a 12-point plan for what he believed pension reform in California should look like. The conference committee has met multiple times in public hearings around the state to discuss how to properly implement the plan and stabilize the system in a way that is fair to taxpayers, retirees, and current and future public employees.

The Governor’s 12-point plan provided us with a blue print for returning sensibility to our pension system, but as with any proposed legislation, the devil is in the details on how we proceed. California has multiple pension systems, each with different strengths and weaknesses. In addition, many public employees do not participate in, and are thus not covered by, Social Security. For those reasons and more, it became clear that a “one size fits all” approach would be, at best, problematic for the state, counties, cities and special districts.

Over the last six months, the pension committee has worked hard to provide body to the essence of the Governor’s conceptual proposal, including the elimination of pension “spiking,” double-dipping, the purchase of “air time,” and retroactive pension increases.

The legislative session resumed this week. It is my hope that the conference committee will release our pension reform package to the public in the coming days. In addition to the areas I mentioned above, we’ll also be unveiling a strategy for encouraging employees to work longer and retire later, and for building  upon the progress made in negotiations between the Brown Administration and state employee unions (and between local government agencies and their labor groups) to require workers to pay a larger share of their pension contributions.

All told, our reform package will ultimately save taxpayers and government agencies billions of dollars, while providing an appropriate balance between public fiscal integrity and retirement security for public employees.  

I believe that the legislature and Governor will work together to put California back on track, but this can only happen if Democrats and Republicans set aside their differences to pass this sustainable package of pension reform bills.

Assemblymember Michael Allen is a member of the legislative conference committee on public employee pensions.