Gov. Jerry Brown's public pension plan drew a mixed review Tuesday from the nonpartisan Legislative Analyst's Office, sparking criticism from a group hoping to put its own retirement-rollback measure on the 2012 ballot.
The LAO said the governor's plan to put new state and local employees into so-called "hybrid" pension plans and raise the qualifying age for drawing retirement, among other changes, is "a bold starting point for legislative deliberations."
But the report questioned whether Brown's proposal to split pension costs equally between employers and current employees could be legally mandated. The LAO also faulted the governor's plan for skipping the pension and retiree health shortfalls facing the state's teachers' retirement system and the University of California.
"Despite the strengths of the governor's pension and retiree health proposal," the LAO report says, "it leaves many questions unanswered."
Brown wants the the Legislature to put his plan on the November 2012 ballot. That would require two-thirds support in both the Assembly and the Senate.
California Pension Reform, a group hoping to put a tougher retirement overhaul plan on the November 2012 ballot, hammered the analysis for failing to note that administration officials had said the state would save $4 billion to $11 billion over 30 years. Local governments would see similar proportional savings, officials said.
Worst-case estimates have pegged CalPERS' unfunded pension obligations at $240 billion for its promises to 1.6 million current state and local employees, retirees and their dependents. CalPERS officials have said that amount is inflated by flawed forecasting methods.
"We need bold, comprehensive reform now and cannot continue to wait as politicians debate the issue and tinker around the edges," California Pension Reform's Mike Genest, a former state finance director, said in a statement.
California Pension Reform has said its plan to put new state and local hires into 401(k)-style savings accounts that don't guarantee state-backed benefit levels to retirees would save employers a combined $7 billion a year once it took full effect in five years.
Dave Low, chairman of labor coalition Californians for Retirement Security, said that Brown's plan has "far too many unanswered questions and lack of details to fairly and accurately evaluate the impact of these proposals."
Many state and local public employee unions have bargained employer pension cost savings, Low said, and he labeled proposed mandated pension changes "a legal dead end."