Victor Nava on How California’s Pension Reforms Have Been Spiked

California’s Public Employees Pension Reform Act
of 2013 states that pensions for new employees must be based on
employees’ “normal monthly rate of pay or base pay,” and the law
specifically excludes one-time or ad hoc payments from being
counted towards pensionable pay. However, a public employee pension
committee determined during an August hearing that temporary
upgrade pay, along with 98 other different types of special pay
items, will be counted as normal pay and will count toward pensions
for all employees. As a result, Reason Foundation Policy Analyst
Victor Nava explains, this relatively tame effort to reform the
Golden State’s soaring pension costs has been subverted, and
municipalities will struggle to deal with dozens of new
opportunities for employees to spike their pensions at the
taxpayers’ expense, sometimes just by meeting basic job
requirements.

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