The Governor's pension reform plan includes a "Hybrid" pension for new employees that combines a reduced DB pension benefit with a DC, 401(k) type plan. This may impose a disproportionately large burden on low-wage workers who are ill-equipped to bear the risks and increased costs of a 401(k) style plan, need to replace a greater portion of earnings in retirement, and begin their working careers much earlier and experience shorter life expectancy than professional workers. The proposal to increase the age at which employees can receive full retirement benefits to 67 across the board for new, non-safety employees could also have a significant impact on low-wage workers.
