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Editorial: Lawmakers ready to make pension crisis even worse

March 17, 2026

In the late 1990s, California’s pension systems were flush with cash as the stock market boomed. Instead of charting a sustainable path forward, lawmakers — on a bipartisan basis — caved to the demands of the state’s public-safety unions and dramatically increased pensions for California Highway Patrol officers.

They retroactively granted the “3% at 50” retirement formula, which allowed officers to retire with 90% of their final year’s pay as early as age 50. It amounted to a 50% increase for many officers. As planned, firefighters and other safety employees then secured the same benefit. Non-safety employees also used Senate Bill 400’s increase to negotiate major hikes. It spread across the state.

During SB 400’s debate, CalPERS’ (California Public Employees’ Retirement System) president claimed this massive benefit boost wouldn’t cost “a dime of additional taxpayer money.” But in the ensuing decades, Californians found that the increased taxpayer-backed pension costs by astounding levels, especially after the 2008 financial meltdown.

SB 400 precipitated the state’s pension crisis and led to severe cutbacks in public services. It precipitated municipal bankruptcies in Vallejo and Stockton. It led to tax increases and diverted funds from the state budget. History may be repeating itself as the Legislature — again on a bipartisan basis — is advancing two bills to unnecessarily increase pensions.

The first is Assembly Bill 1383, which would allow unions to negotiate bigger pensions and earlier retirement dates. It would eviscerate the Public Employees’ Pension Reform Act of 2013. Signed by Gov. Jerry Brown, PEPRA increased retirement ages and reduced benefits. It was a modest law, as it only applied to new hires. But it staved off disaster. This legislation would largely return the state to the pre-reform days. It’s a disastrous idea, yet it has widespread support.

The next measure, Assembly Bill 1054, is even more irresponsible. It would create a so-called Deferred Retirement Option Plan (DROP) for law enforcement and firefighters that would allow them to receive a massive payout at retirement in addition to their already generous pensions. It’s totally unnecessary. CHP officers receive an average pension of $144,000, but that only tells part of the story. The Transparent California database shows page after page of California public employees, mostly in public-safety professions, receiving eye-popping pension benefits.

DROP programs are highly controversial. “We are talking about people staying in government service for an additional five years, drawing a six-figure salary, then getting a lump sum payment of a million dollars each,” Assembly member Carl DeMaio, R-San Diego, told CalMatters. That’s a fair summary of it from a veteran of those old pension battles.

Once again, supporters claim it won’t cost taxpayers anything — and could even reduce payroll costs. Any lawmaker who makes that claim is just providing cover for a massive new union benefit that will endanger taxpayers. As CalMatters added, some DROP plans “have a poor reputation among taxpayer advocates because they risk driving up expenses from already-underfunded pensions systems.”

After a long-running stock-market boom, CalPERS has only 79% of the funds it needs to make good on all its promises. And there are many troubling economic signs — tariffs, Iran war, housing and tech bubbles — that could lead to a downturn that would in turn obliterate pension-funding ratios. Are we really going to do this again?

Orange County Register

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Editorial: Lawmakers ready to make pension crisis even worse

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