School Superintendents Want Newsom to Freeze School District Pensions

In a letter to Gov. Gavin Newsom, superintendents from several major school districts requested a two-year freeze on scheduled increases in pension contributions that could save billions of dollars, according to published reports.

The districts have been paying an increasing amount of money into the systems each year since 2013 under long-term plans to improve the pension systems’ financial health.

In 2018, Pasadena Unified School District Superintendent Brian McDonald told the City Council that since 2013, the district has been plagued by debt due to rising pension costs.

We fully support the requests by districts to the state for a two-year freeze on scheduled increases to pension contributions,” said PUSD Board Vice President Scott Phelps. “It would save PUSD millions of dollars that could then be used to fill in for the state revenue that is being lost during this crisis.”

According to one estimate freezing pensions would save an estimated $1.3 billion in 2020-21 and less than half of that in 2021-22.

If the governor freezes pensions, district contributions to the California State Teachers Retirement System and the California Public Employees’ Retirement System would halt.

The superintendents want Newsom to declare a budget emergency to use the state’s rainy day fund, known as the Budget Stabilization Fund, to support a stream of school funding that can vary with economic changes.

“In addition to our vulnerable populations, students whose parents are experiencing job loss, homelessness, or who may be in foster care will need additional supports to ensure their academic success,” the letter states.

Superintendents from Los Angeles, San Diego, Long Beach and Riverside signed the letter.