Lawmakers Seek to End “Pension Spiking”


Blame it on Bell.

State lawmakers advanced bills Monday aimed at removing ways that can be used to inflate the pensions of public employees.

A bill approved in the Senate, AB1987, would prohibit employees of some counties from using last-minute retirement incentives to drive up pension benefits, a practice referred to as "pension spiking."

It also would prevent county government retirees from increasing their benefits by immediately returning to a job with their previous employer on a part-time or contract basis.

The legislation also sets standards for the way public retirement systems calculate benefits and requires periodic audits. The bill passed on a 27-1 vote and returns to the Assembly for final action.

It was prompted by revelations in Bell, a city of 37,000 where high salaries for city officials led to an outcry.

A companion bill, SB1425, was approved by the Assembly on a 65-0 vote and returns to the Senate for final action.

That bill would prohibit pension spiking by state employees covered by California's two largest pension funds, the California Public Employees Retirement System and the California State Teachers Retirement System.

"These measures, taken together, constitute real pension reform," said Assemblyman Alberto Torrico, D-Fremont.

The bills passed amid increasing debate over the growing cost of pensions. Gov. Arnold Schwarzenegger has said he would not sign a budget agreement until the Legislature takes steps to reduce pension benefits.

Copyright AP - Associated Press
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