Unions don't like proposed state pension reforms

August 12, 2011 4:57:36 PM PDT
Despite the uncertainty of the stock market, a new study suggests the state could save billions of dollars by adopting a 401(k) retirement plan for some state workers.

The report was released on Friday by the California Foundation for Fiscal Responsibility. The report says state and local governments can save greatly if early retirees contribute up to half of the cost of their health plans.

It also proposes reducing guaranteed pension benefits in half and replacing them with a 401(k) plan.

Public employee unions are crying foul.

"Only two percent of pensions are over $100,000," said Steve Maviglio with Californians for Retirement Security. "The typical pension is $26,000. Many people on retirement don't even get social security who have worked for the government."

Critics o the study say it's ironic that the author of the reporter is former Governor Schwarzenegger's finance director Mike Genest, who is receiving a $126,000 a year pension.

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