Earlier today, every state legislator received the following letter signed by 400 members of the GFC Network. Votes are expected before August 31. Let us know of any questions.
Team GFC
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August 18, 2026
Re: AB 1383 (McKinnor), as Amended July 1, 2026 – OPPOSE
To Members of the California State Legislature:
On behalf of the Govern For California network, we write to express our strong opposition to AB 1383. By increasing public employee pension benefits without mandating adequate upfront funding, this measure threatens to exacerbate a crisis that already burdens California governments with massive pension debt that diverts billions annually from essential public services.
When pension commitments are made, taxpayers and employees are meant to share the upfront “normal cost” contribution equally. Combined with investment returns, this contribution should be fully sufficient to cover future benefits. However, when upfront contributions fall short, an “unfunded liability” is generated—a debt borne entirely by taxpayers.
For years, California’s public pension funds have prescribed insufficient normal cost contributions, forcing taxpayers to absorb unfunded liabilities. These shortfalls are not the result of poor investment performance; pension funds have achieved strong returns. Rather, funds like CalPERS and CalSTRS calculate normal cost contributions using overly optimistic return projections. Relying on inflated expectations artificially lowers normal cost contributions, creating substantial unfunded liabilities for taxpayers.
In the 2024–25 fiscal year alone, state taxpayers were forced to make pension contributions of $36.4 billion compared to just $11.6 billion from employees. An arrangement intended to be an equal 50/50 split has instead shifted into a lopsided 76/24 cost burden on taxpayers. A similar shift has taken place at local public pension funds.
AB 1383 would throw kerosene on a pension fire that’s already consuming California government budgets. It rolls back the PEPRA pension reforms enacted in 2013 while still allowing CalPERS, CalSTRS and other public pension funds to use inflated investment return assumptions in order to keep normal cost contributions artificially low. The bill would lower retirement ages, establish new retirement formulas, expand what counts as a pensionable benefit, and even allow negotiations that could do away with the 50% cost-sharing floor on normal cost.
Public pension commitments should require one of two safeguards for taxpayers: normal cost contributions based on returns from secure assets like U.S. Treasuries, which would guarantee promised payouts without extra taxpayer funding, or an explicit guarantee that taxpayers be shielded from absorbing any financial shortfalls. Unless AB 1383 is amended to include one of those safeguards, the bill must not advance.
Sincerely,
<List of Signers>
