Issue link: http://educator.cta.org/i/48466
ACTION WITH CRIES FOR pension reform coming from all corners, it's no surprise the governor has gotten into the act and unveiled a 12-point plan for teachers and public employees that will likely — in some form — be headed to the November 2012 ballot for voters to decide. • Introduced in late October, the governor's plan is not without controversy. Among the 12 points are proposals to: • Implement a "hybrid plan" that combines the current employer-sponsored "defined- benefit" pension with a risky 401(k)-style "defined-contribution" plan. • Increase the retirement age of teachers and public employees from 60 to 67. • Change the one-year highest compensation to the highest average annual compensa- tion over a three-year period. (See chart.) But it's important to remember that this is only a starting point. The proposal will go through the legislative process with multiple public hearings and opportunities for input CTA has concerns and will work for changes Governor proposes 'hybrid' pension reform and changes. CTA will make sure the Legislature and the governor have full knowledge of teachers' concerns. "We share in the gover- 80 70 60 nor's vision of having a strong retirement system for educa- tors, but at the same time, we have concerns about some of these proposals and what the impact will be on the retire- ment benefits of educators and public education," says CTA President Dean E. Vogel. "That's why CTA is taking the lead on this issue. We are meeting with key legislators and are working closely with other labor and education stake- holders. We want to make sure this doesn't limit the state's ability to recruit teachers." Of particular concern is the governor's proposal to implement a hybrid plan, which 50 40 time CalSTRS Plan Percentage of highest year salary time Governor's Plan Percentage of highest average over three-year period would put teachers' historically stable defined- benefit plan at risk and make it susceptible to the whims of Wall Street. "The governor's proposal would force teachers to become financial experts by hav- ing to manage their own investments through story continued on page 41 $70,000 $65,000 38 California Educator / November 2011 annual salary in thousands $60,000 $65,000 $70,000 $60,000 $65,000 $70,000