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Schwarzenegger Abandons Pension Overhaul

RICH PEDRONCELLIGov. Arnold Schwarzenegger listens to a question dealing with the governor's withdrawal of his plan to partially privatize California's public employee pension system, during a Capitol news conference held in Sacramento, Calif.JIM WASSERMAN
Associated Press

SACRAMENTO, Calif. (AP) -- Under pressure from firefighters and police officers, Gov. Arnold Schwarzenegger on Thursday backed off, for now, his plan to privatize California's public employee pension system.

The Republican said ''misconceptions'' among firefighters and police officers that privatization would strip them of death and disability benefits had come to dominate the issue.

Over the past few weeks, Schwarzenegger has waged a campaign to put privatization on the ballot during a special election next fall. But on Thursday, he said he would wait until the June 2006 election if lawmakers did not craft a compromise measure in the coming months.

''Let's pull it back and do it better,'' said Schwarzenegger, flanked by more than a dozen police, fire and local government leaders.

The move followed days of meetings with police and fire chiefs and survivors of firefighters and police officers killed in the line of duty, all of whom expressed concerns that the ballot language opened the possibility that the employees would lose death and disability payments.

The attorney general's office, analyzing the proposed ballot language, had earlier reached the same conclusion.

Schwarzenegger said that was not his intention.

Schwarzenegger, who has called the state's pension system ''another government program out of control,'' wanted to hold down the state's escalating pension contributions by making new employees open 401(k)-style individual investment accounts.

The state's contribution to the pension system this year is $2.6 billion, up from $160 million in 2000.
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