California Approves Pension Reform Legislation
Sacramento, CA– The California State Legislature has overwhelmingly approved pension reform legislation, Assembly Bill 1987. This week’s Assembly vote of 70 – 0 followed a 28 -1 vote by the Senate on Monday night. AB 1987 eliminates pension spiking, double dipping, golden handshakes, strengthens oversight and provides for audits of county pension systems.
The average state employee pension is $2,100 a month and 78% of all retirees earn less than $36,000 a year. The abuse that has received much of the public scrutiny has occurred at the highest levels of management.
AB 1987 will prevent employees from accruing years of vacation time and other forms of leave and cashing it in upon retirement to boost their pension. Large severance or settlement pay for a retiring employee will no longer be calculated into the pension equation. The bill will also prevent employees from retiring on Friday and being re-hired on Monday, a practice known as double dipping. Finally, AB 1987 will, for the first time, provide oversight and audit responsibility to the local retirement boards. All retirement boards will have the power to deny intentional spikes or manipulated pension payments.
The Governor has until September 30th to act on AB 1987.
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