On The Money: Pension Reform Fight

By Mike Luery

SACRAMENTO (CBS13) -- The fight over pension reform is heating up at the Capitol, where advocates say they're ready to launch a constitutional amendment that would change how California does business.

Dan Pellissier is with California Pension Reform. His group is actively lobbying the Capitol to change the State's pension system.

Pellissier told CBS 13, "We're going to have one run through the legislature and hopefully they will adopt this common sense provision that would save $2 billion a year."

The group says $2 billion can be saved in the first year by lowering benefits for future and current state workers, along with placing a 5% cap on contributions by state agencies.

If the legislature shoots down the constitutional amendment, California Pension Reform plans to spend $2 million to place it on the ballot in June 2012. State workers are strongly opposed.

"Obviously our members would react negatively to that," said Jon Hamm of the California Association of Highway Patrolmen. "And what we basically said is let us help how we can be part of the solution, "Hamm told CBS 13.

For the CAHP the solution involves contributing 10% of their salaries to their pensions under their new contract – but many public employees pay far less into their pensions – just 5% to 9%.

But what does Governor Brown think about pension reform? I asked the governor that very question in a one on one interview in his office.

"We want to make sure we do what is right," the governor told me.

Brown added, "What is right for the taxpayers, right for the workers. And it's not just shifting people to a totally different pension plan. It's making sure that the pensions are sound.  That they pay for themselves and that means that the employees contribute what they should, the employer contributes what it should and then of course we invest wisely to get the returns from the stock market.

So what happens next? In his campaign platform, Governor Brown outlined several key points:

- Putting a stop to pension spiking
- Placing a cap on excessive retirement benefits
- Pushing back the age of retirement

In his campaign materials, Brown noted that during his first term as governor, the retirement age for state workers was 60.