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8. A, 13 PENSION REFORM from page 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . In his State of the State speech last week the governor also signaled his strong interest in a measure that would do away with the traditional defined benefit plan for new state and local public employees, replacing it with the defined contribu- tion plan preferred by many in the private sector (essentially employee-funded and managed 401 [K]-type investment accounts). Two Other Reform Proposals His proposal joins two other earlier announced proposals: ACA 5 - Richman (Northridge), which would also replace defined benefit plans with defined contribution plans for new public employ- ees (beginning July 2007); and The Fair and Fiscally Responsible Public Employees Re- tirement Act, submitted to the Attomey General for official title and summary by the Howard Jarvis Taxpayers Association. This proposal would limit the amount a public agency contributes to a defined contribution plan with important adjust- ments for education and public safety employees. The Jarvis group describes their measure as "a fair and balanced approach to restoring long-term fiscal responsibility' which "limits the cost of govemment employee pensions which have grown dramatically in recent years.' All three measures affect all public employees, i.e. city, county, state, judges, special districts and teachers. While the issue of pension reform has long been debated, the introduction of competing measures, coupled with the governor's strong statements in support of reform, are a good indication that the issue may be headed towards a statewide ballot initiative. League Task Force Considers Alternatives Anticipating the importance ofthe pension reform issue, late last year the League organized a Pension Reform Task Force charged with coming up with a list of recommendations on the cost control issue and other concems, including possible alternatives to the current reform propos- als. Comprised of city managers, finance direc- tors, human resources directors and League staff, the goal of the task force is to develop a plan that shows immediate savings to the state in the short and long term, while also addressing new policies that benefit both employees and emplDyers in the area of disability reform. To achieve this goal, the task force is analyz- ing a number of issues to reach a better under- standing ofthe factors driving increasing pension costs. Among their findings: there is some significant variation among cities' experiences with pension benefit packages. For example, there are cities that are fully funded and functioning excep- tionally well under the DB plan, including (but are not limited to) Los Angeles, Oakland and San Francisco. The task force recommendations will ulti- mately be sent to the League's Employee Rela- tions Policy Committee for consideration, and then to the board of directors for their review and approval. In the meantime, the League has not taken a position on ACA 5 or any other proposal. The League's intent is to work with all parties - the administration, Assemblyman Richman, employee organizations, CALPERS and other stakeholders - towards meaningful cost savings solutions. For more information on this and other leagœ issues, visit www.cacities.org. Visit the League's Official Web Site--www.cacities.org PRIORITY FOCUS/PAGE 5