Controversial California Pension Ballot Measure Gets Initial Approval

California Secretary of State Alex Padilla approved two pension-related measures, both of which are striving to be placed on the 2016 ballot, on Thursday.

That means the backers of the initiatives, including former San Jose Mayor Chuck Reed, can start collecting signatures.

More from Reuters:

The measure would take aim at CalPERS, America’s largest public pension fund with $300 billion in assets. It is the administrator of pensions for more than 3,000 state and local agencies, and has long argued that pensions cannot be touched or renegotiated, even in bankruptcy.

One initiative, in part, would bar government employers from contributing more than 11 percent of their base compensation. The other initiative, in part, would bar the enrollment of new employees in defined benefit pension plans.

Both initiatives would bar government employers from paying more than half of the cost of their pension and retiree healthcare benefits without voter approval.

“By putting a cap on the payments it ensures we won’t be generating these huge unfunded liabilities that will then drive the cost (higher),” Reed said.

“Employees would have to pay more if they want a bigger or more expensive pension, or they have to ask the voters to approve it,” he said.

The measures each need 585,407 signatures in the next 180 days to get on the November 2016 ballot.

Photo by  San Jose Rotary via Flickr CC License