Pension Intervention: Reforming California's Public Employee Retirement Systems PRI Study By: Anthony P. Archie 2.14.2006
With a looming budget deficit of $7.3 billion, California needs to adopt more cost-saving measures. Changing the state’s pension system would be an excellent place to start.
California’s Public Employees Retirement System (CalPERS) provides pensions to 1.4 million former state employees. These retirees receive benefits under a “defined benefit” plan, where pension amounts are guaranteed by the state based on a combination of salary and years of service. Under this scenario, an employee with 30 years on the job, making $50,000 a year, can retire at age 55 and receive an annual pension of $30,000, or 60 percent of his or her original salary.
