Benefits October 8, 2010

Schwarzenegger Agreement with Union Includes Pension Concessions

October 8, 2010 (PLANSPONSOR.com) - The Schwarzenegger administration and Service Employees International Union Local 1000 have reached a tentative labor agreement that includes higher contributions by California government workers to their retirement plans and rolls back pension formulas for new hires to pre-1999 levels.
Reported by

The Sacramento Bee reports that under terms of the pact, current workers would kick in an additional 3% of their pay toward their pensions. Union negotiators also agreed accept one day of unpaid leave per month for a year, which cuts employee pay and hours by roughly 5% per month. In exchange, workers covered by the agreement won’t be subject to furloughs that lawmakers might impose during that period (see CA High Court Upholds Governor’s Furlough Order).  

The Bee said the deal also continuously appropriates payroll funding for the life of the contract, a provision that shields covered workers from their pay being temporarily withheld to the federal minimum allowed during budget delays.   

The contract must be ratified by union members and the Legislature, and would run from July 1, 2010, to July 1, 2013. The union represents 95,000 workers, nearly half the government’s organized workforce.   

According to the news report, six other state worker unions representing about 37,000 employees have reached labor agreements with the governor in recent months, and all accepted various concessions in pay and benefits.

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