Pension reform “fraught with legal obstacles”


In this Jan. 7, 2016, file photo, Gov. Jerry Brown discusses his proposed 2016-17 state budget. Ballooning pension costs are an issue Brown will face in his final year in office despite his earlier efforts to reform the state's pension systems and pay down massive unfunded liabilities. (AP Photo/Rich Pedroncelli).

The budget-busting abuse known as pension spiking is illegal under state law in Alameda, Contra Costa and Merced counties — but leaders must allow it anyway (!) because “the county pension systems had agreed to permit it as part of legal settlements with the unions nearly two decades ago. ”

The latest from pension watchdog Dan Borenstein.

Recent court rulings have favored pension reform. But the latest appellate court ruling is a setback. It may torpedo key parts of Gov. Jerry Brows’s 2012 Public Employee Pension Reform Act. That law was all too inadequate, but at least it trimmed the most egregious abuses of public employee self-enrichment.

“In the latest decision, the justices ruled that pension benefit adjustments require “compelling” evidence that they are necessary and a showing that the pension system would otherwise have difficulty meeting its financial obligations.” The imminent insolvency of municipalities up and down the state evidently did not rate consideration.

“The good news is that the decision, issued by a three-justice panel in San Francisco, probably won’t be the final word on the issue,” Borenstein writes. “The state Supreme Court had already agreed to hear appeals of two other cases stemming from the 2012 legislation and is expected to take the latest one too.”

Borenstein’s take: “The road to meaningful reform is fraught with legal obstacles.”


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    Michael Fitzgerald

    Mike Fitzgerald is The Record’s award-winning metro columnist. His column runs in the paper three times a week. Born in San Francisco, he was raised in Stockton. His column covers diverse beats including, sometimes, the offbeat. Read Full
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