Assemblyman Floats DC Plan for Golden State Employees

January 5, 2005 ( - A California assemblyman is planning to introduce a ballot initiative that would establish a 401(k)-style pension plan for public employees in the Golden State.

Assemblyman Keith Richman (R- Grenada Hills) has announced the plan to file the initiative, according to the Los Angeles Daily News. He has also introduced the proposal as a constitutional amendment in the state legislature. Richman, working with the powerful Howard Jarvis Taxpayers Association, must collect 600,000 signatures to qualify for the next ballot.

Richman, along with many others, contends that the current system is too costly a burden on the state’s coffers. “The issue of pension costs in California has become a crisis,” Richman told the Contra Costa Times. “Retirement benefits are diverting away money from basic day-to-day services.”

The proposal would call for new public employees hired after July 1, 2007 to only be offered a defined contribution plan, rather than the state’s traditional defined benefits plan. Current employees would be offered the opportunity to switch and receive credit for money already paid into the system, the Daily News reported.

The plan should meet stiff resistance in the state legislature from Democrats with the Times labeling the plan “dead on arrival,” according to news reports.