California's transit workers' pensions would be left untouched under a plan submitted by Gov. Jerry Brown to temporarily exempt them from legislative reforms.
Brown's plan was announced one day after the U.S. Department of Labor cut off $54 million in aid to the Sacramento transit system. The aid cut made good on a threat issued last month by Labor Secretary Thomas Perez to cut off $4.3 billion in transportation aid to the state over the next year if it went ahead with the pension changes. Perez contends the changes violate a 1964 federal law.
Brown's proposal was worked out in talks with federal officials. It would, according to a news release, allow the state to continue fighting for changes in pension benefits while creating the exemption through the end of 2014 for 20,000 workers. The Sacramento Bee reported that the city's transit system plans to file a lawsuit over the lost aid. Brown's bill would also provide loans to Sacramento to make up for the lost federal aid.
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California lawmakers are expected to approve the bill next week.
The fight started last September when Brown signed into law changes in the state's pension system. The changes included: capping annual salary used for calculating benefits at $110,000; requiring employees to pay 50 percent of pension contributions; raising the retirement age from 55 to 67; and ending "air time," the practice of allowing workers to purchase service time to increase their benefits.
The changes in California's pension system primarily affected CalPERS, the California Public Employees' Pension System, and CalSTRS, the California State Teachers' Retirement System.
Transit union spokesman Barry Broad said the unions aren't claiming victory.
"This isn't something we see as a win or loss," Broad told the Sacramento Bee. "It serves the purpose of allowing the federal grant money to flow, which we all support, while the matter is litigated in court."
Joshua Shaw, executive director of the California Transit Association, said his organization supports Brown's plan.
"We hope the litigation process goes favorably for Sacramento RT and the governor," Shaw said. "If it doesn't … we'll have to see where we are at that point."
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