Thousands of Orange County workers will begin voting Saturday on a new contract that includes a two-tier "hybrid" retirement plan that would require a new state law before it could go into effect.
The proposed option would push back the retirement age to 65 from 55 and result in a smaller pension.
But the amount of money workers would pay into their pension plan would be cut by nearly half, and the county would match up to 2 percent for a 401(k), according to the Orange County Employees Association, which represents the workers and is backing the proposal.
The plan, which requires adoption by the workers, the county Board of Supervisors and a bill passed in the Legislature, would be voluntary for all OCEA workers and new hires, according to a posting on the union's Web site.
Under the proposal, OCEA's 13,500 members could keep their current plan, which allows them to retire at age 55 with 2.7 percent of their final pay times the number of years they have worked, or retire at age 65 and collect less, but pay less into their plans.
Under the current pension system, some county workers can collect up to 90 percent of their salaries, although union officials say the average pension is "modest."
Emphasizing that no employees, not even new hires, would be required to take the new pension plan, union leaders are recommending a yes vote when the members vote Saturday through Wednesday.
Get Los Angeles's latest local news on crime, entertainment, weather, schools, COVID, cost of living and more. Here's your go-to source for today's LA news.
Under the current plan, 30-year employees who make $60,000 a year pay about $700 a month toward their pension and can retire at age 55 and collect more than $4,000 a month, the Orange County Register reported.
Under the new plan, employees could not retire until age 65, and a 30-year employee making $60,000 would collect $2,430 a month. But while working, they would pay about half as much as under the current plan -- $360 a month -- and could decide how much to put into a 401(k) plan, which the county would match up to 2 percent, the Register reported.
The Orange County Board of Supervisors will vote on the plan July 14, a county official said.
But before the proposal could go into effect, the Legislature would have to pass a law allowing counties to offer more than one retirement plan.
The Orange County Employees Retirement System is under-funded by about $2 billion, which must be covered by the county's general fund, officials said.
How much money the new plan would save is unknown because it has not been reviewed by an actuary, the Register reported.