Wednesday, July 1, 2009
Cut State Pensions
I agree with the Governor's proposal to cut pensions for workers hired in the future. California pensions are way out of line with the rest of the country, create substantial animosity in the private sector for public employees, are a significant contributor to long-run deficits, and have to be reformed. Yes, it won't solve next year's budget crisis and is more of a long-run solution, but we need long-run solutions too. Ideally, we could switch them to a defined contribution (401k type) plan like most of the private sector, but that is unlikely.