By Chuck Reed
Decision making and management of California’s public pensions should be open, transparent and non-political. Unfortunately, as Judy Lin points out in her recent LA Times article, that’s not been the case. California’s major public pension systems continue to over promise and under fund employee benefits, racking up hundreds of billions of dollars in pension debt, and California’s cities are helpless to do anything about it.
The California Supreme Court will soon have an opportunity to change that paradigm by allowing future benefits for future work to be negotiable. The so called “California Rule” has been used to prevent negotiations over benefits that have not yet been earned, creating a massive obstacle for pension reform to control pension debt. The limits of the California Rule will be decided by the Court in several cases where public employees believe they have a right to spike their benefits above what their salary entitles them to receive.
Chuck Reed, former Mayor of San Jose, is a board member of the Retirement Security Initiative.