Posted 1 year ago on March 6, 2012, 2:58 p.m. EST by GirlFriday
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The 12 point plan attacks pension rights that were won through hard-fought struggles and which are guaranteed in the California Constitution. In a clear sign of the bi-partisan character of Brown’s anti-worker policies, his proposal has the full support of Republican legislators and corporate leaders.
Under Brown’s proposal, public employees will not be able to retire until their 67th birthday—up from the current retirement age of 55. In order to collect a full pension, workers hired in their 20s would need to work more than 40 years. This includes blue-collar workers, such as park employees and maintenance workers, whose daily duties impose a hard physical toll.
Under the Brown plan, traditional pensions based on years on the job and that pay a set percentage of a worker’s salary—known as “defined benefit” pensions—would be replaced by “hybrid” pensions that combine workers’ so-called cash balance of their defined benefit pensions with partial investment into a 401K plan, (with no guarantee of what the retirement benefit will be) and with Social Security.
Ostensibly, each of these three separate plans would contribute 25 percent of the workers last salary, toward his or her pension. What workers can really expect is a probability distribution: i.e., a gamble. For workers to do well in this scheme, they would have to retire when the stock market is up; they would need to contribute substantial savings to their 401K plan; and they would need to have a good Social Security pension. Many jobs, such as teachers, transit workers and county employees, are not included in the Social Security system. A worker would have to accumulate Social Security coverage working at least 10 years in another job.
This combination is highly regressive in its impact. While all pensions will be slashed, low-wage and part-time workers will be most severely affected. They are less able to make enough contributions to cash balance pensions to make up for the slashing of their defined benefits retirement. Those lower paid workers that also are engaged in physical labor, will suffer a double blow http://www.wsws.org/articles/2012/mar2012/calp-m06.shtml