A proposed ballot measure that would allow California cities to change the retirement benefits of current government employees drew a quick, sharp response from CalPERS, the state's retirement system.
CalPERS said the ballot measure, which its backers said would ensure that the pension system is sustainable, runs counter to guarantees made by the state and federal constitutions, would force it to breach its fiduciary duty and would put into law measures that have been shot down by the courts.
"CalPERS is bound by fiduciary duty to deliver the promised pension benefits according to the U.S. and California constitutions, statutory law and case law," it said in a statement said. "CalPERS will continue to support and defend our members' vested rights, in accordance with the laws of the land and our obligations under the federal and state constitutions."
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The ballot measure was filed with the state attorney general on Tuesday by five Republican and Democratic mayors representing San Jose, San Benardino, Santa Ana, Anaheim and Pacific Grove. Supporters need to gathers 807,000 signatures on petitions to get the initiative on the November 2014 ballot.
The chairman of Californians for Retirement Security, a group that fights changes to the pension benefits of public employees, issued a statement decrying the proposed changed.
"This extreme proposal … breaks the promise of a secure retirement made to millions of Californians, many of whom are ineligible for Social Security and have an average pension of $26,000 per year," said Dave Low. "It will allow public employers to unilaterally cut the retirement benefits promised to current teachers, firefighters, police officers and school bus drivers."
A 2012 measure pushed by San Jose Mayor Chuck Reed gave current municipal employees the choice of paying more to remain in their current plan or moving to a plan that would pay lower benefits. Unions are challenging the change in court.
Like other public pensions plans, CalPERS has been struggling in the aftermath of the recession and growing unfunded future liabilities. California Gov. Jerry Brown last year pushed changes to pension benefits through the legislature. Unions have been fighting some of the changes. The system's pension payments have doubled since 1999.
CalPERS, the largest public pension fund in the country, administers the pensions of more than 1.6 million retirees. Its assets total more than $265 billion.
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