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COPYRIGHT 2006 Contra Costa Times
Byline: Rebecca Rosen Lum
Jan. 26--IBM just did it. So did Verizon. Within the past two months, the two corporate giants froze their workers' pensions. Employees learned that future years on the job wouldn't increase their pension checks.
More and more firms are trying to cut costs this way. So, if it's good for private companies, why hasn't the public sector jumped on board? Answer: It can't. Public agencies across California, including Contra Costa County, are facing soaring pension costs that threaten to wipe out money desperately needed for public services.
But the state Constitution's contracts clause and two key court decisions lock in the retirement benefits. Once a public employee starts earning traditional pension benefits, that employee is guaranteed increases for every additional year of work. "It's a huge issue with huge consequences," said Steven Frates, senior fellow at the Rose Institute of State and Local Government at Claremont McKenna College. "It's only now beginning to be dimly grasped." Take Contra Costa, where union contracts are up for negotiations this year. In 2002, the county promised its public safety workers pension benefits equal...
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