RJ and Makay

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Governor Jerry Brown’s proposal to raise the age, from 55 to 67, for state public employees’ retirement with full benefits, if passed, would put California in the company of only three other states that have raised the retirement threshold to shave state budget costs.  The change, which still requires legislative or voter approval, reflects the effects of Americans increased longevity and the resulting pressure it adds to government pension plans.

Corporations have been doing it for many years to save money, and now many states are seeking to follow suit. The strategy: switch employee retirement plans from the more costly traditional defined benefit (DB) type to a potentially cheaper defined contribution (DC) plan.

In fact, there's currently a push for DC plans in 10 states — Arizona, California, Florida, Kansas, Kentucky, Nevada, New Hampshire, North Carolina, Virginia, and Wisconsin. Some of these states are combining efforts to introduce DC plans or DC/DB hybrids with attempts to eliminate or limit collective bargaining rights by unions.