The Pension Reform Act of 2014 – Update as of 3/18/2014
THE PENSION REFORM ACT OF 2014 Update as of 3/18/14 On March 14, 2014, San Jose Mayor Chuck Reed announced that he and fellow supporters decided to suspend efforts to qualify their initiative, “The Pension Reform Act of 2014″ (AG# 13-0043) for the upcoming November 2014 General Election. The decision came after Sacramento Superior Court Judge Allen Sumner rejected Reed’s lawsuit against Attorney General Kamala Harris, citing inaccurate ballot language. The judge stated that Reed failed to prove that the ballot summary was false, misleading or biased. As a result of this legal challenge, the proponents concluded that there would not be sufficient time to obtain the 807,615 valid signatures to qualify the initiative for this year’s November election. Instead, they will resume their efforts later for the November 2016 election. Background The Pension Reform Act of 2014, officially titled, “Public Employees. Pension and Retiree Healthcare Benefits. Initiative Constitutional Amendment,” would have amended the California Constitution to allow all public employers, including the City of Los Angeles, if they so choose, the option to modify future pension and retiree health benefits of current employees. The initiative would have provided the following: The constitutional protections would be eliminated for current public employee pension and retiree healthcare benefits for service not yet performed. Government employers would have the flexibility to reduce employee pension benefits for future service if their pension plans are substantially underfunded or if they declare a fiscal emergency. Benefits earned for service already performed would remain protected by law and may not be modified. As such, current retirees or an employee who retires prior to any benefit changes would not be impacted. Government employers would be required to publish a non-binding “stabilization report” for every year that the actuarial funding status of their pension plans is below 80 percent. Please be assured… The Board of Fire and Police Pension Commissioners, management and staff will continue to monitor this and other pension reform efforts and provide member updates as they become available.