Posted on 10/11/2010 7:52:56 AM PDT by SmithL
By winning a deal last week to scale back pension benefits for public employees, Gov. Arnold Schwarzenegger beat one of his most formidable opponents: CalPERS.
Schwarzenegger and his aides have hammered the California Public Employees' Retirement System over the past 18 months, citing its steep investment losses and its role in raising pension benefits a decade earlier. The administration painted a portrait of a pension fund that refused to look its problems squarely in the eye.
The fact that CalPERS needed an extra $600 million from state taxpayers this year – to help it cope with its losses from 2008 – strengthened the governor's hand. And experts said CalPERS was probably weakened politically by a bribery scandal that's still unfolding.
In the end, the fund did not take an official position on the governor's effort to reduce benefits. Spokesman Brad Pacheco said Friday that CalPERS is "pleased" that the parties reached "common ground."
"I think it was probably inevitable," said J.J. Jelincic, a CalPERS board member and employee who once led the California State Employees Association.
With the Legislature attempting to close a $19 billion deficit, the climate was ripe for pension reform, said Jack Pitney, an expert on California government and politics at Claremont McKenna College.
"The problems just became too vast to ignore," Pitney said. "It became glaring that the benefits to public employees were a large part of the (budget) problem."
The budget deal passed early Friday doesn't just create a two-tier system that scales back pensions for newly hired workers.
It also imposes new reporting requirements on CalPERS, forcing the nation's largest public pension system to explain itself to the governor, state treasurer and Legislature when it needs more money from taxpayers.
(Excerpt) Read more at sacbee.com ...
Popular Comment
"A loser attitude gets us nowhere. SEIU and state negotiators can take this contract and stick it. We are the ones in control and they’re nothing. Reject the contract and see if the legislature and courts will support the governor over us—who cares if they do, I want to fight some more. We, state employees, are the government and provide the services that Californians depend on; they (politicians, union employees, news media, etc.) talk about services like they couldn’t possibly stop. Wrong! We are not the private sector and we don’t have to suffer with them to prove our worth."
CalPers’ job is to manage the pension funds that come in from both state and local governments. It has nothing to do with the pension agreements that these unions negotiate with those governments. So, the key issue is that city, county and state governments are giving away the store with their pension agreements.
Now, couple that with a CalPers board which is now in the control of unions and other left wing groups and has been making horrible investment decisions these last few years. So, we have CA governments at all levels giving ever more generous pensions, and a pension board making ever more bad investment decisions.
This article is a joke. Real pension reform has yet to arrive in California. It may not until the state faces bankruptcy.
Can anybody please explain to me, why exactly, Our Public Servants and Public Employees deserve a Larger Retirement Benefit than What the NATIONAL Social Security Plan offers??
Personally I think we need to ABOLISH ALL Taxpayer Funded Retirement Plans. That is what the proposal should have been and when the unions threaten to strike, let them California has 20% Unemployment, Fire them and put out the Help Wanted signs, those jobs would be filled overnight.
Good. Now if we can just do this for “new hires” entering the Social Security system 30 years or more from retirement.
In this way, we could reform Social Security in about a generation, while still paying off our “promise” to at least some of those in the system now.
“This article is a joke. Real pension reform has yet to arrive in California. It may not until the state faces bankruptcy.”
Unfortunately your analysis is reasonable. The pension agreement is just a baby step. Legislators are still living in a fantasy world. Pensions to existing workers and retirees will likely drive California and many other states into economic oblivion. Despite intense pressure from government unions, politicians must act now to provide a clear roadmap to ensure economic viability. Numerous recent academic studies have shown the truth behind public employee pension obligations. My studies in Colorado have shown the incredible value of the pensions to long-term employees.
The pensions of administrators and higher paid professionals is a good place to start. The pensions are just unconscionable pumped by pension spiking. The pension agencies and entire public employee pension industry is founded on fraudulent claim.
The market bubble in both equities and bonds has allowed pension plans to escape the hard decisions for now. There is grave danger ahead. Pension agencies must take big bets now because of very low bond yields and the pressure to fund increasing amounts of retirees. Recent retiree pensions will break the pension plans when the next market decline occurs.
don't people realize that making the younger people carry the load in EVERYTHING is not going to work?....
but if they want to do that, at least make those pensions not start until age 60 or 62...
I'd harp on the private industry pensions too but at least they're not depending on taxpayers dollars....at least not NOW...
“it goes even deeper than that.....why should any govt employee be getting practically their full paycheck in 20 or 30 yrs of work.....less for many of them...”
I fully agree but I would go even further. I would convert all government pensions into 401K plans. The taxpayer cannot guarantee a retirement lifestyle. Legislators are living in a fantasy that taxpayers cannot guarantee. The longer that legislators postpone this inevitable decision, the worse will be the pain when it occurs.
It is unfair to ask the average citizen to support everyone in government for the rest of their lives while those productive workers depend on subsistence from Social Security in their retirement years.
In fact, that is precisely what SS was created to do, and it should be the de facto pension in these cases.
In other words, fair up!
Anything else means that you, the general public, are simply slaves, albeit wage slaves, who are to work and work and support the vast number of government workers forever.
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