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CA: Governor touts plans to reform state pension system
San Diego Union -Tribune ^ | 2/10/05

Posted on 02/10/2005 3:57:23 PM PST by NormsRevenge

SAN DIEGO – Gov. Arnold Schwarzenegger made a stop in San Diego today to push his plans to reform California's $171 billion pension system.

Flanked by two armored cars along San Diego Bay, Schwarzenegger said California's retirement plan is "bleeding our state dry."

The governor proposed revamping the California Public Employees Retirement System in his State of the State address last month.

He wants to change from a defined benefit to a defined contribution plan for new employees – a switch that must be approved by the state Legislature.

Under that plan, state workers would contribute to an investment account similar to the 401(k) plans common in the private sector.

According to Schwarzenegger, California's pension obligations have risen from $160 million in 2000 to $2.6 billion this year.

He said what's good for the state would also be good for San Diego, which faces a $1.3 billion deficit in its pension system.

"What San Diego needs is the same thing that California needs, a responsible, affordable, stable pension system," Schwarzenegger said.

"With a defined contribution plan in place for California, we won't have billion-dollar pension deficits sneaking up on us," he said. "We won't have cuts in services to finance our state retirements, and we won't have taxpayers left holding the bag for political giveaways up in Sacramento."


TOPICS: Business/Economy; Culture/Society; Politics/Elections; US: California
KEYWORDS: calgov2002; california; calpers; governor; pension; plans; reform; system; touts

Associated Press

California Governor Arnold Schwarzenegger, surrounded by props, conducts a news conference Thursday Feb. 10, 2005 in San Diego, to push his plan for pension reform.

A game of financial chicken lies ahead. We'll see who 'Brinks' first. ;-)

1 posted on 02/10/2005 3:57:26 PM PST by NormsRevenge
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To: NormsRevenge

bttt


2 posted on 02/10/2005 3:58:46 PM PST by John Lenin
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To: NormsRevenge

Wake me when Arnold pushes for immigration reform ;-)


3 posted on 02/10/2005 3:59:24 PM PST by Canticle_of_Deborah
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To: NormsRevenge
Hmm. Taking on the teacher's union. Taking on the public employees. Taking on the multimillionaire liberal casino operating tribes. Damn it, Arnold, you're putting that RINO designation in real jeopardy here.
4 posted on 02/10/2005 4:07:12 PM PST by kingu (Which would you bet on? Iraq and Afghanistan? Or Haiti and Kosovo?)
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To: kingu

Yeah, now if he could unsign the Sierra Nevada Conservancy and unappoint a few leftists, greenos and dems from posts ,, he'd really be headed the right direction.


5 posted on 02/10/2005 4:13:01 PM PST by NormsRevenge (Semper Fi ...... The War on Terrorism is the ultimate 'faith-based' initiative.)
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To: NormsRevenge
Will the revamping of the State's pension plan include elected offices, legislatures, judges, sheriffs, etc. Some where I've read "a worthy leader always eats the same food as those he leads".
6 posted on 02/10/2005 4:15:22 PM PST by drypowder
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To: kingu

If California goes under will the entire US be far behind ?


7 posted on 02/10/2005 4:16:55 PM PST by John Lenin
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To: NormsRevenge
Anything that gives Barbara Cur (Kerr) indigestion and heart failure at the same time...
8 posted on 02/10/2005 4:23:25 PM PST by tubebender (Can someone remind me what my Near Years resolutions were...)
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To: NormsRevenge

Not to treat the immigration issue lightly, but pension reform is the single most important issue that must be tackled...immediately. If placed on the ballot, pension reform will be approved by the voters, despite millions of dollars spent by the unions. The net long-term, positive effect on taxpayer dollars would be enormous. I would hope that any pension reform plan would place a cap on "employer contributions" at 3%, just like the private sector.


9 posted on 02/10/2005 4:23:37 PM PST by doctor noe
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To: NormsRevenge
There a lot of California voters who are either in CALPERS or are married to someone who is or is friends with someone who is. Destabilizing the public pension system may not be a wise move for the future.
10 posted on 02/10/2005 4:24:44 PM PST by BenLurkin (Big government is still a big problem.)
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To: doctor noe

Not to treat the immigration issue lightly, but pension reform is the single most important issue that must be tackled...immediately.
=======
Well when the reforms of the pension issue can net the state more than $10B to $15B dollars annually, then it will be more important than the immigration issue. Not to slight all the other issues that are attached to the invasion of illegals into our state...such as the importance of our borders, our soverignty, the meaning of our laws, U.S. citizenship, and national security. Maybe the pension system may have to wait...IF WE CAN GET ANYONE TO PAY ATTENTION TO THE ILLEGAL IMMIGRANT ISSUE...which is a tragedy and a travesty upon this country...


11 posted on 02/10/2005 4:34:29 PM PST by EagleUSA
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To: NormsRevenge; SierraWasp; Carry_Okie; Amerigomag
At the San Diego Tribune website there is a link to listen to Arnold's comments today. He keeps says there has been a 1600% increase in contributions in the last 5 years, implying it has to do with increased benefits. What a bunch of cr@p! This is false advertising at its finest!

Mercury News

There is much reason to question turning to 401(k) plans, including the possibility that the transition costs will eat up any savings. One alleged justification, the rise in state pension costs from $160 million in 2000 to $2.6 billion today, is simply deceptive. In 2000, an anomaly, a booming stock market nearly eliminated the need for the state to contribute to the fund. Pension costs are not doubling annually.
San Francisco Chronicle
-- Current shortfalls in some municipal pension funds are not because of bloated benefits. Rather, they are the result of the precipitous drop in the stock market in 2000-2001 that affected even giant pension-fund managers such as CalPERS. Yet the governor and his friends now want to shift all the stock- market risk from fund managers to employees.

-- Defined-contribution plans are not cheaper to administer. According to CalPERS, it costs 18 cents per $100 invested to administer a defined-benefit plan. At the same time, it can cost up to $1.35 per $100 -- or nearly eight times as much -- to administer a 401(k)-type plan.

(snip)

Indeed, a report two weeks ago by Milliman Consultants and Actuaries found that Los Angeles County would pay nearly $1.3 billion more to administer the Schwarzenegger/Richman pension plan between 2007 and 2017 than it would pay for the current plan. And the Schwarzenegger/Richman plan would not result in a net savings until at least 2024.


12 posted on 02/10/2005 4:36:45 PM PST by calcowgirl
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To: NormsRevenge
""With a defined contribution plan in place for California, we won't have billion-dollar pension deficits sneaking up on us," he said. "We won't have cuts in services to finance our state retirements, and we won't have taxpayers left holding the bag for political giveaways up in Sacramento."

I can dig it.

13 posted on 02/10/2005 4:37:44 PM PST by Tempest (Click on my name for a long list of press contacts)
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To: NormsRevenge
How much does the Sierra Nevada Conservancy cost us? From what I've seen it's a rather reasonable a fair proposal.
14 posted on 02/10/2005 4:39:14 PM PST by Tempest (Click on my name for a long list of press contacts)
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To: BenLurkin

According to the article this only affect new hires.


15 posted on 02/10/2005 4:40:17 PM PST by Tempest (Click on my name for a long list of press contacts)
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To: calcowgirl
Wow, I really want a ride on that boat.. Win money in the market, great! Lose money in the market, wonderful, since the California taxpayers will still pick up the tab.

When did public service become a career? Teachers, police, firemen - fine. Nothing for desk workers, only for field personnel. The rest can go get real jobs and we can fill the voids with those who don't mind working to help their fellow citizens instead of watching the calendar for retirement.
16 posted on 02/10/2005 4:46:32 PM PST by kingu (Which would you bet on? Iraq and Afghanistan? Or Haiti and Kosovo?)
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To: Tempest

near term in monies,, negligible but as it rolls out and gets its legs, the cost in legal fees for property owners caught amidst its unfolding legalities and controls that disenfranchise business and property owners, the sky is the limit.


17 posted on 02/10/2005 4:48:34 PM PST by NormsRevenge (Semper Fi ...... The War on Terrorism is the ultimate 'faith-based' initiative.)
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To: Tempest

If so, then the article is incorrect in that respect. The Governor's plan aims to induce workers presently in the system to "opt out" in exchange for a one time 'bonus'. Those who remain in the system will be required to both pick up the resulting shortfall in those workers' contributions and to pay a portion of what had been the State's contributions.


18 posted on 02/10/2005 4:49:03 PM PST by BenLurkin (Big government is still a big problem.)
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To: kingu

If you do the math, you will find that the anomaly is not losses, it was great GAINS,
thereby making the 2000 contributions abnormally LOW.
Unfortunately, the state then spent the difference on other 'freebies'.

Get this: there are no savings in this proposal. It will cost more!


19 posted on 02/10/2005 4:51:24 PM PST by calcowgirl
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To: Tempest
That's the problem with all these new ideas. The Governor needs to attack all the employees, state and teachers. Why should a state employee have a free ride on the shoulders of the people that they are supposed to help. Also, getting rid of the tenure system for the teachers and make them work for their raises and to keep their jobs is a great idea. Why should a teacher after a certain amount of time get tenure and never worry about losing their job?? No one in the public or private sector should be indispensable. Everyone should have to work hard for their position. I work in the private section. If I don't keep up my standards, I will be looking for a new job, QUICKLY!!. They, the teachers' and public employees should be held to some standard too.
20 posted on 02/10/2005 4:53:35 PM PST by antiunion person (For the Preservation of the United States, WE Need to Close Down the Borders.)
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To: EagleUSA
Agreed. However, the pension issue can be handled rather expeditiously and has widespread voter support. I'd prefer we cripple the unions first, then we can move on to tackling the far bigger issue of illegal immigration...it will be a long, hard fight.
21 posted on 02/11/2005 9:54:47 AM PST by doctor noe
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To: doctor noe
If we didn't spend so much freakin money in this state educating, medicating and generally donating to illegal aliens there would be no pension issue.

Oh, by the way I'm a state employee who does a job 90% of the folks in this state wouldn't have the intestinal fortitude to do - Corrections.

22 posted on 04/07/2005 11:00:12 AM PDT by footballbat
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To: EagleUSA
Here Here!!!

If the goverator would spend half as much time and money trying to curb the illegal immigration issue as he does trying to take away my pension this state would be fiscally fixed almost over night.

The guy makes me ashamed to call myself a republican.

Mike

23 posted on 04/07/2005 11:07:54 AM PDT by footballbat
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To: footballbat
You have nothing to worry about. Pension reform will only affect new hires after 2007. Since the politicians don't have the "intestinal fortitude" to cut spending elsewhere, then the voters will mandate the end of CA's ridiculously unaffordable pensions. Talk about driving a stake through the heart of the employees' unions!
24 posted on 04/07/2005 11:29:44 AM PDT by doctor noe
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