Victor Nava on How California's Pension Reforms Have Been Spiked


Calif. Flag
Grunge Textures

California's Public Employees Pension Reform Act of 2013 states that pensions for new employees must be based on employees' "normal monthly rate of pay or base pay," and the law specifically excludes one-time or ad hoc payments from being counted towards pensionable pay. However, a public employee pension committee determined during an August hearing that temporary upgrade pay, along with 98 other different types of special pay items, will be counted as normal pay and will count toward pensions for all employees. As a result, Reason Foundation Policy Analyst Victor Nava explains, this relatively tame effort to reform the Golden State's soaring pension costs has been subverted, and municipalities will struggle to deal with dozens of new opportunities for employees to spike their pensions at the taxpayers' expense, sometimes just by meeting basic job requirements.