“The board of directors of the League of California Cities urges the Legislature to enact AB 340 (Furutani), the California Public Employees’ Pension Reform Act of 2013 (PEPRA). While not perfect, the League views this legislation as a substantial step forward in implementing pension reform largely in keeping with the League’s own comprehensive pension reform principles. This recommendation is made in recognition that there are numerous questions of implementation and interpretation that will need to be resolved in the days and months ahead. The League and cities will continue to be vigilant in advocating for effective pension reform to ensure the intent of this historic legislation is respected. Finally, the League board congratulates the elected and appointed city leaders of California for their pension reform actions to date, and it respectfully urges them to continue their leadership on this vital issue at the local level.”
Commenting on the pension reform proposal and the recent League board action, League President and Mountain View Mayor Mike Kasperzak said: “The city officials of California recognize that pension reform is a journey and not just a destination. They have enacted a number of cost-saving pension reforms already, and this legislation would give them valuable new tools for achieving additional savings with existing employees while at the same time requiring more sustainable and affordable pension plans for new employees. This is a win-win for the cities and taxpayers of California, and we appreciate the Governor’s and Legislature’s leadership on this important issue.”
This year reform of the state’s pension laws is the first and most important strategic goal of the League of California Cities. Hundreds of cities have already made major strides in the last few years to reduce current and future pension costs. A League survey of city managers earlier this year revealed that 47 percent of the responding cities had already adopted a new pension tier for new employees and 64 percent of the cities had already secured higher employee cost-sharing for pensions from existing employees through collective bargaining.
Chris McKenzie, League executive director, observed: “Admittedly AB 340 is not a panacea for every pension-related fiscal problem facing city governments, but it represents real and substantial progress in bringing pension costs more into line with the resources available to the cities of our state. The Governor deserves credit for tackling this problem head-on, and we look forward to working with the Legislature and him in the next few years to achieve even greater savings and accountability from our retirement systems. This is a joint goal on which state and city leaders have continued shared interests.”
The League has prepared a side-by-side analysis of the proposed pension reform plan and the plan adopted by the League’s board of directors in July 2011.