Earlier this week, Democratic gubernatorial candidate Jerry Brown released one of the few specific policy proposals of his campaign. Republican opponent Meg Whitman has criticized Brown for being too vague on his plan to reform California's struggling government. Now he's hitting back with a plan to curb the exploding cost of state worker pensions, and it sounds an awful lot like the key elements of deals Governor Schwarzenegger has negotiated with the state's unions.

In a move that came as a surprise to many, and could chill support from the labor unions that currently back Jerry Brown's bid for governor, Brown is calling for state employees to contribute more to their retirement funds, and says he would raise the age of retirement from 55 to 60 for newly hired state workers. Meg Whitman would make it 65, and apply the change to all state employees, including current workers.

Another key difference between the two, is that Jerry Brown wants to maintain the state's pension system, which pays out benefits to retired state workers from California's budget. Whitman prefers to keep the pension system for current workers, while transitioning into a more 401(k)-style plan for future hires. Enacting her plan, Brown argues, "is to cast everyone into the loving embrace of Wall Street."

But it's important to remember that California's state workers are already at the mercy of Wall Street for their pension. Just how did the state's pension program get so bad in the first place- so that even the union-backed Democratic candidate for governor is calling for a reduction in benefits and an increase in the retirement age? It all started in 1999 when CalPERS, the California Public Employees' Retirement System (which invests its holdings on Wall Street) made some pretty incredible forecasts about the future value of its stocks.

CalPERS projected in 1999 that the Dow Jones Industrial Average would reach 25,000 by 2009, 595,000 by 2049 and 28 million by 2099! On these projections, the Legislature passed massive increases in benefits for state workers without matching increases in worker contributions to their retirement. A decade later, the Dow is in the 10,000s and the state's projections were clearly inaccurate.

It also seems that CalPERS hasn't learned its lesson, telling a journalist just last year that "it implicitly forecasts the Dow to double in 10 years and hit 7 million by 2099." Any comprehensive reform of the state's pension system must address the fact that CalPERS essentially gambles with the taxpayers' money and the state workers' contributions.

No individual saving for retirement, or fund manager with a business reputation to protect, could afford to make such irresponsible projections. But with the taxpayer to bail CalPERS out of every miscalculation, there is no incentive to rein in forecasts and plan responsibly.

At this point Californians should be asking: Why should the state be making the retirement and investment decisions for its employees instead of putting those choices in their hands?