Press Release
California’s Pension Reforms at Risk Amid Legislative Proposals
Recent stock market volatility and ongoing economic uncertainty have raised alarms regarding California’s public pension system, which faces $285 billion in unfunded liabilities as of 2023, according to Reason Foundation research. Policymakers are considering proposals that would roll back critical reforms established by the 2012 Public Employees’ Pension Reform Act (PEPRA). These reforms, signed by then-Gov. Jerry Brown, aimed to stabilize pension costs and alleviate the burden on state budgets by altering retirement benefits for future hires.
However, lawmakers aligned with public labor unions now seek to reverse these pivotal changes, potentially thrusting California back into a pension crisis reminiscent of a decade ago. Notably, Assembly Bill 569 would enable local governments to bypass PEPRA’s benefit limits, fostering costly, unfunded increases. Similarly, Assembly Bill 1383 threatens further changes by restoring pre-2012 benefits for public safety employees, compromising financial sustainability.
Despite claims that enhancing pension benefits will attract employees, surveys indicate that factors like salary and work-life balance top workers’ priorities. Maintaining PEPRA reforms is crucial for addressing the state’s pension debt and ensuring fiscal responsibility. Failure to do so could cost taxpayers tens of billions in the future.
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