Arnold’s last act: New contract scales back state pensions — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Arnold’s last act: New contract scales back state pensions

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Members of Local 1000 of the Service Employees International Union, which represents 95,000 California state employees, have voted to accept a new labor contract that features significant pension reforms sought by Gov. Arnold Schwarzenegger.

The new contract returns retirement benefits to the level state workers received before a 1999 law increased state pensions. According to Schwarzenegger, who leaves office Jan. 3, that law (S.B. 400) made public employee pension benefits unsustainable.

Under the terms of the new labor accord, current state employees will pay more of their own money into retirement funds, while new workers will receive less generous pensions and benefits.

The new contract also includes protections from furloughs and wage cuts, which the union sought.

Workers will receive 12 unpaid personal days each year, which can be carried forward and taken at a later date. In addition, state employees—who have been furloughed two to three days a month under the state’s current austerity plan—are now protected from future furloughs.

Local 1000 members will also be protected from wage cuts during budget stalemates.

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