Administration reaches accord with two more state-worker unions

By Capitol Weekly Staff | 06/28/10 12:00 PM PST

The state has reached agreements with two public employee unions covering 14,000 workers, the Union of American Physicians and Dentists and the International Union of Operating Engineers, that include boosting the number of years that employees must work in order to qualify for retiree for full pensions and retiree health benefits, and doubling the workers’ contribution to their pensions from the current 5 percent to 10 percent.

The agreements require legislative approval.

The Schwarzenegger administration also said that active negotiations are beginning today with the 95,000-member SEIU Local 1000, the largest state-employee bargaining unit.

With the pacts announced Monday, the administration has reached tentative agreements with six of the 21 state bargaining units. One union, the California Correctional Peace Officers Association is not in active negotiations with the state.

Under the two latest agreements, workers would be required to work an additional five years before qualifying for retiree health care. That provision, if applied to all the bargaining units, would result in a $20 billion savings to the state over 30 years, according to the state.

For both unions, the full pension benefit level for most state employees of 2 percent per month of highest salary will require five additional years of service, and will be reached at 60 years of age, not 55, as it is currently. For public safety employees, it will be 2 percent at 55. Currently, it is 2.5 percent at 55.

The changes, which apply to new hires, means new employees would be required to work 25 years instead of the current 20 to be eligible for full retiree health benefits.

The agreements, like the earlier pacts, call for workers to take an unpaid leave day per month – the equivalent of a 5 percent pay cut. In a departure from earlier agreements, the latest accords include an exemption for workers from a pay cut to the federal minimum wage in the event that the state does not approve a budget.

The earlier contracts of the IUOE and the UAPD contained a requirement that pension levels be calculated according to the highest three years of wages, a provision that has been sought by the administration as part of its budget-related, pension-system changes.