SACRAMENTO, Calif. — Gov. Gavin Newsom vetoed a bill that would have lowered retirement ages and increased pension benefits for police officers and firefighters, Cal Matters reported.
Newsom vetoed Assembly Bill 1383 on Sept. 20, in spite of strong legislative support. He cited concerns of a potential pension crisis as the reason for his rejection.
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AB 1383 would have lowered the retirement age from 57 to 55 and allowed unions to bargain for bigger pensions by increasing the maximum accrual rate to 3% from 2.7%, Cal Matters reported.
The bill would have also increased the maximum retirement income cap for high-earning public servants.
Supporters of AB 1383 cited support for first responders when passing it through congress. The bill passed unanimously in the Senate and 70-2 in the House.
In his veto, Newsom stated that parts of AB 1383 would contradict the Public Employees Pension Reform Act, a 2013 statute intended to reverse damage that the Great Recession and dot-com bust caused to the state’s pension system. Officials feared at the time that pension accounts would become insolvent, Cal Matters reported.
The losses from the recession still affect the system, with accounts funded at about 85% of what they owe to their members.
“I still recall — before PEPRA’s passage in 2012 — the alarming forecasts, the fierce criticism of public employees, and the growing pressure to eliminate defined benefit plans all together,” Newsom wrote. “This is an era of California history I do not wish to repeat.”
Cities and counties also opposed the bill, due to the increased costs of funding the pension system faster, Cal Matters reported.
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