PRESS RELEASE : CALIFORNIA
State Budget Solutions Applauds California Pension Reform
Alexandria, VA - Today, State Budget Solutions (SBS), a nonprofit organization advocating for fundamental reform of state budgets, released the following statement applauding voters in San Diego and San Jose for overwhelmingly approving a measure to cut retirement benefits for government workers and reform pensions.
"Last night's votes demonstrated that when government fails to enact pension reform, voters can step up and make a difference. Since 2010, in California, there have been 20 votes for pension reform in 12 cities and only two losses. People know that unfunded pension liabilities are the dark cloud on the horizon of state budgets; a cloud totaling trillions of dollars. That is why voters in San Diego and San Jose overwhelming voted to reform pensions.
Aggressive pension reform is urgently needed in almost every state. And reform must include moving from defined benefit plans to defined contribution plans, which are similar to the 401(k) plans offered by the private sector. Defined benefit plans guarantee specific levels of service regardless of cost, whereas defined contribution plans establish a fixed payment toward services. Instituting defined contribution plans would end the endless cost escalations of non-salary compensation. A move to defined contribution plans would reduce the risk to taxpayers, provide lawmakers with a reliable cost estimate for budgeting and give state workers control over their retirement funding.
The voters in San Diego and San Jose should be applauded for saving their cities millions of dollars and stabilizing the rocky pension system. "
To set up an interview with Bob, please contact Meghan Tisinger at Media@statebudgetsolutions.org