California Gov. Jerry Brown and Democratic lawmakers unveiled pension reform legislation Tuesday that keeps most benefits for current public employees but raises the retirement age for new state hires.
The legislation calls for a annual pension cap for new public employees, who will be required to contribute at least half of their pension costs and will see their retirement age increases to 67 from 55 for current employees, according to the San Diego Union Tribune
. Public-safety employees, such as police, fire, and teaching personnel will see their retirement age increase to 57 from the current 50.
Brown said the changes could eventually save $30 billion. But some experts say the state's two pension funds are underfunded by at least $150 billion.
Although the legislation redefines benefits for both state and local public employees, the reach of the law would be limited, as charter cities will be exempt and local agencies will be permitted to adopt less generous pension plans. The University of California system would also be unaffected by the proposal because it is independent under the California Constitution, according to the Union Tribune.
Democratic lawmakers are pushing for approval of the bill by the end of the legislative session at midnight Friday. If it passes, it would take effect on Jan. 1, 2013.
The bill is opposed by organized labor and by Republicans for different reasons. Employees unions don't like the changes and GOP state lawmakers say the legislation doesn't go far enough to address the state’s unfunded liabilities.
© 2014 Newsmax. All rights reserved.