Threatened Suit Against UC Behind Bill To Cap Public Employee Pensions

SAN FRANCISCO (KCBS) - The pensions of the state's highest paid public employees have become the latest target of Sacramento politicians struggling to close a budget deficit now estimated at more than $28 billion.

A bill introduced in the Assembly would cap pensions for state employees who earn $245,000 at the same limit as federal employees, whose future pension benefits are calculated based on a maximum income of $195,000.

"Our focus needs to be on solving this budget deficit, improving our economy and getting people back to work. The last thing we should be focusing on is increasing pensions for public employees who are making over $245,000 per year," said Assemblyman Jerry Hill.

KCBS' Margie Shafer Reports:

The San Mateo Democrat's bill would close a loophole that authorizes the University of California and other tax exempt entities to waive that federal limit, granting what Hill called exorbitant pensions to their highest paid executives.

The University of California received such a waiver in 2007.

The inspiration for the legislation was a threat to sue made by several dozen UC Berkeley executives after the UC Regents decided not to raise their pensions under the formula allowed by the IRS.

The executives claim they were promised the higher pensions when they were hired, while the regents maintain that nothing obliges the university to make those increases automatically.

Hill said he has bipartisan support for the bill, and support from unions.

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