State Union’s Agree to Roll Back Pension

Thursday, June 17, 2010

SACRAMENTO - The California Highway Patrol officers’ union and three other state labor groups have agreed to contract terms with Gov. Arnold Schwarzenegger that roll back pension benefits for new state hires and increase all employees’ retirement contributions.

The deals would also protect the unions’ members from the threat of minimum wage when lawmakers don’t enact a state budget on time and eventually add a top step pay increase.

“We’re not blind or deaf to the unique times in California. We want to get the necessary discussion of (pension) reform behind us,” said Jon Hamm of the California Association of Highway Patrolmen.

The three other unions are the California Department of Forestry Firefighters, the California Association of Psychiatric Technicians and the American Federation of State, County and Municipal Employees, with the contracts covering 23,000 state employees including patrol officers, firefighters, health and social service professionals and psychiatric technicians.

The tense negotiations wrapped up around midnight on Tuesday, a source with knowledge of the talks told The Bee. It’s the first time that several unions have coordinated their negotiations.

The contracts must be approved by rank-and-file members and the Legislature, and then signed by the governor. The process will take several weeks, but the contracts would take effect immediately when signed.

The outcome of the contract talks reflects the emphasis that the Schwarzenegger administration has put on cutting employee pension costs. Newly hired patrol officers and firefighters would come in under a new pension formula that would allow them to retire at age 55 with 3 percent of the average of their highest three years of pay multiplied by their years of service up to 90 percent of that average wage. Current employees can retire at age 50.

New and existing employees in all four groups would increase their pension contributions to the California Public Employees’ Retirement System from the current 5 percent of their pay to 10 percent. That has also been high on Schwarzenegger’s agenda.

The agreements also include a provision that covered employees would be paid even when lawmakers fail to enact a budget by the June 30 fiscal year-end. Unions have long sought that protection, since the law allows state worker pay to be withheld to the federal minimum wage when there’s no money appropriated in a state budget to pay the employees.

Schwarzenegger invoked that law in 2008, although opposition from state Controller John Chiang delayed action on the order long enough for the Legislature to enact a budget, rendering the governor’s order moot. But the issue has resurfaced. The 2010-11 budget year is about to start on July 1, and it looks likely that lawmakers won’t get a budget deal done by then.

The agreements for the psych techs and the health professionals include one day of unpaid personal leave per month during fiscal year 2010-11, the equivalent of just under a 5 percent pay cut. The contract proposals for firefighters and patrol officers don’t include that provision.

Story Courtesy of Sacramento Bee 6/17/10