News Articles

California Pensions: An Interview with Dave Low

By Chad Aldeman, TeacherPensions.org
April 3, 2014

Dave Low is the Executive Director of the California School Employees Association and the Chairman of Californians for Retirement Security, a coalition of 24 unions including the California Teachers Association and the California Federation of Teachers. Low has been a leading advocate for the state’s public pension plans and actively pushed back against a proposed statewide ballot initiative that would have changed California’s constitution to allow state and city governments to make prospective changes to retiree benefits.

To better understand the issues around California’s pension plans, I spoke with Mr. Low. The following interview has been edited for clarity and length.

Chad Aldeman: California's pensions are significantly under-funded. As of June 30, 2012, the California State Teachers’ Retirement System (CalSTRS) was only 67 percent funded and had liabilities that were almost $71 billion more than its assets. CalPERS, the California Public Employees’ Retirement System, was underfunded by $76 billion. Can you talk about how we got here?

Dave Low: First of all the term “severely underfunded” is probably not very accurate. CalSTRs at 67 percent is underfunded, but in terms of actuarial analysis, a funded plan would be a plan that’s between 80 and 100 percent funded. So to say that all plans are severely underfunded is not completely accurate. The main reason that we got here is because of the economic downturn and the abuse and fraud that went on on Wall Street that ended up sapping money from everyone’s pension plans as well as everyone’s 401(k)’s. During that crisis, plans lost approximately 30 to 40 percent of their assets which is a devastating hit. Individuals lost that amount or even more in their defined-contribution plans. So prior to the economic downtown, CalSTRS and CalPERS and most of the pension plans were more than 100 percent funded.

Aldeman: How do we unwind today’s under-funding problem? I know that both the large California state pension plans had a pretty good year of investment returns last year and exceeded their targets. Can we grow our way out of this problem? Are we likely to get back to 100 percent funding in the near future or anytime soon?

Low: I don’t think we’re going to get there anywhere in the near future, but I don’t know what might happen in the long-term. If you look at the past, in 1980, CalPERS, CalSTRS, and most of the California funds were at a funded status of 50 to 55 percent. Then over the next 20-25 years, they achieved a super-funded status at over 100 percent. So it’s possible to get back to 100 percent or greater over time, but I don’t think anyone would say that that’s going to happen over the short-term. It’s just not the way it works. Unless they put their money on red in Vegas and won.

Read the full interview from TeacherPensions.org here.

   

Dave Low: What's Next for Pensions?

By Dave Low
March 14, 2014

Public employees have the most at stake in the discussion about the health of public pension systems. That’s why, despite the measure proposed by San Jose Mayor Chuck Reed being pulled from the November statewide ballot, public employees will remain actively involved in the conversation. We’re not celebrating. Neither are we shying away from this difficult discussion. We’re asking what we can do next to help.

The political stage — theater fueled by big money donors and inflammatory TV ads — was the wrong venue to have this important discussion. The state’s teachers, firefighters, police officers, garbage truck drivers and other public employees are willing and eager to negotiate — but the proper venue for doing so is the bargaining table.

In fact, that kind of progress is being made through collective bargaining all across the state. According to CalPERS, public employee unions in nearly 400 municipalities have agreed to over 600 changes to their labor agreements in recent years. The concessions include paying more into our own retirements, agreeing to reduced formulas, and even raising the retirement age. For example just last year, city workers in Whittier and public safety workers in Rialto agreed to increased cost-sharing. However, that kind of bargaining rarely earns newspaper headlines.

Read the full story here

   

"I am not Margaret Mead"

Despite decades of social and economic gains, older American women are still twice as likely as elderly men to be living near or below the federal poverty line. They are also less likely to have access to reliable retirement income.

Many factors contribute to this disparity, but unequal pay, retirement plan access, family obligations and financial literacy are its main causes. Two-thirds of American women over the age of 65 have no other retirement income other than Social Security. The average monthly Social Security benefits for women is around $1,000.

   

Dave Low: California’s pension ‘crisis’ hype whipped up by billionaires with agenda

California's pension 'crisis' hype whipped up by billionaires with agenda

By Dave Low

October 18, 2013

By starting the political process of placing a measure on the November 2014 statewide ballot, San Jose Mayor Chuck Reed has rekindled a debate over breaking the retirement promises made to public employees — a debate that had rightly begun to die down in California.

On Tuesday, Reed filed paperwork with the state Attorney General’s Office as a first step to asking voters to alter the state’s constitution in regard to the pensions promised to current police officers, firefighters, teachers and other public workers.

 

Before that, Reed had already begun raising hundreds of thousands of dollars from out-of-state billionaires and giving speeches to conservative audiences, peddling his idea.

Read more: Dave Low: California’s pension ‘crisis’ hype whipped up by billionaires with agenda

   

Texas billionaire funds latest attack on California pensions

By LAPPL Board of Directors, October 17, 2013

A new pension initiative funded by out-of-state interests has been filed to amend the California Constitution to let the City reduce the pension benefits of police officers and other government employees. Texas billionaire John Arnold, who made millions working for Enron during the Enron-initiated California energy crisis, provided the majority of the funding for this initiative.

The initiative would allow all public employers to unilaterally reduce its employees’ pension formula going forward, increase the age at which employees would be able to retire to collect a retirement under the new formula, and increase the amount of money employees have to pay into the pension system each week. The initiative establishes that all of the changes would be set at whatever level the employer wants.

The initiative sets no floor on benefit changes, so Los Angeles police officers and other city employees would be at the City’s mercy as to how low the takeaways will go. 1.5 percent at age 60 for current police officers; no COLAs for future years of service; no more retiree health care to be earned for future years of service – and any, all or more (less!) could be implemented at the City’s discretion or even decreased in future years if the City wanted to go that route. If the City decided it would no longer pay into the pension system, you would have to pay all of the yearly pension costs that could be imposed.

Read more: Texas billionaire funds latest attack on California pensions

   

California Pension War Inches Forward

California Pension War Inches Forward
By Steven Mikulan
October 9, 2013

San Jose Mayor Chuck Reed made it official today – sort of. Speaking to a pension “restructuring” conference at Stanford University’s Hoover Institution, Reed said he hoped to file papers “in a few days” to put a ballot measure before voters that would allow cities in California to gut the retirement plans of their public employees. But he acknowledged that he and a group of fellow activists weren’t sure whether to put the measure on the ballot for November 2014 or sometime in 2016. (If the pension group wants to beat an approaching deadline and keep 2014 open as an option, it has to file papers soon.)

The lack of urgency contrasted with Reed’s half-hour talk, during which he painted a picture of a California teetering on the brink of pension-fund disaster, in which public safety employees would be laid off, libraries closed and retirement benefits decimated.

 

“Time is of the essence,” Reed warned – claiming that the longer his proposed amendment to the state constitution is postponed, the likelier it will be that current public employees will not be able to enjoy the full retirements they have been promised. It sounded like a preview of the stampede talk Californians are likely to hear if and when Reed’s initiative does land on the ballot.

Read more: California Pension War Inches Forward

   

Op-ed: The myths behind public-employee pension reform

The myths behind public-employee pension reform
By David Sirota and Matt Taibbi
October 10, 2013

Since the once-great city of Detroit filed for bankruptcy, Americans everywhere are in a panic. Is my city next? Is my state facing financial disaster? From Wisconsin's controversial Gov. Scott Walker to New Jersey's Chris Christie, politicians all over seem to be telling us the answer is yes. The fiscal end is nigh, these leaders say, if America doesn't act soon to slay one of the last great budgetary dragons held over from the entitlement age: our allegedly outmoded, unsustainably expensive system of state and municipal pensions.

In the new fable, state and municipal workers are presented as the welfare queens of our age, historical anachronisms living fat and happy in the competition-free panacea of public service, and shamelessly living off the tax dollars generated entirely by the innovation of America's true workforce - its go-getting private-sector employees, who long ago stopped expecting their bosses to give them real health and retirement plans.

To them, the old-fashioned defined-benefit pension plan, the one that guaranteed a unionized state worker extensive health benefits and a sizable monthly retirement check until his (invariably too-distant) death, is the glaring budgetary inefficiency of our age, the first place we must turn to make the fiscal cuts if we don't want to become the next Detroit.

 

Read more: Op-ed: The myths behind public-employee pension reform

   

Exposed: California's Secret Plan to Gut Public Pensions

Exposed: California's Secret Plan to Gut Public Pensions
Truthout
October 8, 2013

A newly leaked draft California ballot initiative authored by conservative groups would drastically slash retirement benefits for current public employees. The document was obtained by Frying Pan News and comes amidst growing concern of an attack on public pensions being carried out by Wall Street and their political allies.

Now joining us to discuss this is Lynn Parramore. Lynn is senior editor at AlterNet and a contributor to the Huffington Post. Her recent piece for AlterNet is titled "Wall Street Wages Secret War against Pensions".

Read more: Exposed: California's Secret Plan to Gut Public Pensions

   

Enron billionaire expands craven plot to abuse workers

Enron billionaire expands craven plot to abuse workers
By David Sirota
October 7, 2013

A week after the simultaneous release of my Institute for America’s Future report and Matt Taibbi’s Rolling Stone investigation into John Arnold, huge news hit California: The Enron billionaire whose former company wrecked the Golden State’s economy appears to be using a shadowy Texas front group to now try to loot the Golden State’s public pension system. As the Sacramento Bee reports (emphasis added):

With the first deadline looming for a new public-pension proposal to make the November 2014 ballot, a Texas nonprofit has emerged in a behind-the-scenes battle poised to break into public view next year.

San Jose Mayor Chuck Reed, a Democrat pushing a controversial idea to dial down government retirement benefits, asked a Houston-based group (called Action Now Initiative) to give $200,000 to his local chamber of commerce last summer for “policy analysis for statewide pension reform” according to a report Reed filed in August…

A message left Wednesday with Action Now wasn’t immediately returned, but it shares an address with the Laura and John Arnold Foundation, which was launched in 2008 by a former Enron executive and his wife. Its website lists a number of causes, including “structural changes” to public pensions that are “comprehensive, sustainable and fair.”

 

Of course, the word “reform,” is now the preferred euphemism for “rip-off scheme.” In the context of pensions, it means pleading poverty to justify cuts to public employees guaranteed retirement income, all while preserving massive corporate welfare and, in many cases, funneling pension cash to Wall Street hedge fund managers.

Read more: Enron billionaire expands craven plot to abuse workers

   

Chuck Reed says "I do" to former Enron exec John Arnold

Chuck Reed says "I do" to former Enron exec John Arnold
The Daily Fetch
October 9, 2013

Numerous sources are confirming to the Fetch that San Jose Mayor Chuck Reed will formally announce that he is putting former Enron executive John Arnold’s Texas money to use to try and change California’s Constitution to allow the raiding of current cops, firefighters, teachers and nurse’s retirement security.

San Bernardino’s Mayor also let the cat out of the bag in his State of the City speech last night where he disclosed the Reed/Arnold scheme would be launched today.  Thanks to our spies for the tips.

Reed’s speech today at the Hoover Institute will be webcast starting at 3 pm on the west coast.  It can be viewed in a live stream here.  For those not accustomed to hearing a Chuck Reed speech, the Fetch recommends highly caffeinated beverages and an occasional self-inflicted jolt from a cattle prod to stay awake.

Read more: Chuck Reed says "I do" to former Enron exec John Arnold

   

Fleecing Pensioners to Save the Banks

The Detroit Bail-In
Fleecing Pensioners to Save the Banks

by ELLEN BROWN

The Detroit bankruptcy is looking suspiciously like the bail-in template originated by the G20’s Financial Stability Board in 2011, which exploded on the scene in Cyprus in 2013 and is now becoming the model globally. In Cyprus, the depositors were “bailed in” (stripped of a major portion of their deposits) to re-capitalize the banks. In Detroit, it is the municipal workers who are being bailed in, stripped of a major portion of their pensions to save the banks.

Bank of America Corp. and UBS AG have been given priority over other bankruptcy claimants, meaning chiefly the pensioners, for payments due on interest rate swaps they entered into with the city. Interest rate swaps – the exchange of interest rate payments between counterparties – are sold by Wall Street banks as a form of insurance, something municipal governments “should” do to protect their loans from an unanticipated increase in rates. Unlike ordinary insurance, however, swaps are actually just bets; and if the municipality loses the bet, it can owe the house, and owe big. The swap casino is almost entirely unregulated, and it is a rigged game that the house virtually always wins. Interest rate swaps are based on the LIBOR rate, which has now been proven to be manipulated by the rate-setting banks; and they were a major contributor to Detroit’s bankruptcy.

Read more: Fleecing Pensioners to Save the Banks

   

Bloomberg BusinessWeek: Public Pensions Up 12% Earn Most in 2 Years as Equities Soar

Public Pensions Up 12% Earn Most in 2 Years as Equities Soar
By Martin Z. Braun
August 06, 2013

U.S. state and local-government pension investments gained the most in two years in fiscal 2013, overshadowed by intensifying scrutiny of underfunded municipal-retirement plans following Detroit’s record bankruptcy.

Public pensions booked a median gain of 12.4 percent for the 12 months through June, powered by a surge in U.S. stock prices to a record, Wilshire Associates said today in a report. The funds chalked up an annualized three-year median return of 11.4 percent while their assets surpassed a pre-recession peak to reach $2.9 trillion, according to U.S. Census Bureau figures.

“I’d be happy,” said Bob Waid, a managing director at Santa Monica, California-based Wilshire. “We’ve had a pretty good three-year run.”

Read more: Bloomberg BusinessWeek: Public Pensions Up 12% Earn Most in 2 Years as Equities Soar

   

CounterPunch: The Disastrous Consequences of Raiding Public Pensions

July 30, 2013

CounterPunch: The Disastrous Consequences of Raiding Public Pensions
by DARWIN BOND-GRAHAM

Detroit’s bankruptcy and a high profile lawsuit in San Jose highlight a national effort led by fiscal conservatives to undo the basic promise embodied in public employee pensions – a guaranteed, defined retirement benefit. If they succeed in unraveling public pensions as has been done to retirement benefits offered by the private sector they might also be erasing one of the most robust counter-cyclical infusions of cash into the economy keeping us from the brink of another crisis.

In Detroit emergency manager Kevin Orr is attempting to cut the pension obligations the city has promised to pay thousands of retirees. He is arguing that a pension is equivalent to bonded indebtedness, and that retirees should take a haircut so that banks can recoup higher interest on their bonds. In San Jose workers are battling the city’s Mayor in court over a ballot measure approved last fall that, if upheld, would circumvent collective bargaining and require public employees to make larger contributions to their retirement fund. Known as Measure B, the law would impose other unilateral changes to San Jose’s retirement plan, ultimately lowering the compensation of employees.

In numerous other states and cities both liberal and conservative politicians and corporate-backed lobbies are attempting to roll back public pensions either by cutting existing obligations, as is the case in Detroit and San Jose, or by reducing future benefits for new hires.

This anti-defined benefit pension campaign, if successful, could have devastating long-term impacts on the economy. Here’s why.

One of the main causes of the Financial Crisis of 2008 was over-burdensome debt used to finance consumer spending. For decades most Americans have seen the real value of their wages drop. But as consumers became poorer they didn’t cut back on buying cars, houses, electronics, and other goodies. This is partly because the financial system proliferated complicated and risky securitized bonds and credit derivatives to expand the possible debt load on the bottom half of income earners. All of the alphabet soup of securitized debt, CDOs, CMOs etc., freed up hundreds of billions of dollars for the creation of new mortgage, credit card, and other debt. Many of the loans extended through this laissez faire regime of credit creation were predatory, designed to exploit low-income borrowers, but so long as the housing bubble continued to inflate, serious harm was contained. With millions of Americans still in command of purchasing power the economy chugged along, but it was an illusion of prosperity. The incomes of most consumers continued to plummet.

In fact, the reduction of defined benefit pension coverage in the private sector is part of the overall decline in workers’ incomes over the past thirty years which has led to higher levels of consumer debt and less ability to sustain demand in the economy. According to the Bureau of Labor Statistics, in the early 1990s 35 percent of workers in the private sector were covered by a defined benefit pension system. This level was even higher in the 1970s. Today the number of workers in the private sector with a defined benefit pension has dropped to just 18 percent. This translates into billions less in income for workers after they retire, meaning billions that aren’t injected into the economy in the form of consumer purchases.

Massive levels of private debt and dwindling income to sustain this debt caught up with us in 2007. Combined with speculative gambles by the banks and insurance corporations the system crashed. Many Americans cut back their spending and the crisis worsened.

The so-called recovery that has been underway since about early 2012 has seen prices of everything from corporate stocks to residential homes bounce back, but incomes for many Americans are not rebounding. The underlying structural cause of the economic crash hasn’t been addressed. Workers are still being paid at levels far below the level of previous decades while much of the national income pie is being devoured by the top one percent. Pension payments in the private sector continue to fall as new workers are offered only defined contribution plans, or in many cases nothing at all.

In Keynesian language, there is no force to sustain aggregate demand. Without consumer demand for basic goods there won’t be industrial investment. Without investment there won’t be new jobs and increases in worker productivity, and the incomes of most Americans will continue to decline in real terms. The cycle spins downward without some sort of intervention to lift the majority into income security.

Consider what would happen now if the pension hawks were to get their way and dramatically scale back the retirement benefits that state and local governments have promised their employees. The crisis of declining incomes for the majority of Americans would dramatically worsen. Millions would endure real pay cuts and in turn reduce their household budgets, and the economic system would choke.

According to the US Census’s survey of pensions, there are about 19.4 million public employees who are members of a public employee retirement system. About 8.6 million of these individuals are currently drawing benefits from the 3,400 state and local pension funds of all fifty states, and thousands of counties and cities.

Each month these pension systems pump $60 billion into the US economy in the form of retirement checks cut to their former employees, and also in the form of early withdrawals. These millions of pensioners spend the majority of this cash on consumer goods, healthcare, housing, food, and travel. It’s a total economic stimulus of about $230 billion a year – almost a quarter trillion in income for the middle class to expend.

The geographic distribution of US public pension funds ensures that these dollars are circulated widely in every region of the nation. Retirees in California, New York, Texas, and Florida obviously expend enormous shares of the total flow of pension income. There are over a million retired California public employees collecting and spending their pensions today, but even tiny Wyoming counts 22,000 pensioners on its rolls. As labor scholar Katherine Sciacchitano has written, “far from just supporting retirees, defined-benefit pensions contribute to economic recovery by providing a long-term, stable source of counter-cyclical spending—spending that continues even during economic downturns.”

Public employee pensions are a key source of income for millions of middle class Americans who sustain a big slice of the US economy simply by spending their retirement checks each month. If pension hawks are successful in Detroit, San Jose, and elsewhere, if the attack on pensions translates into a successful dismantling of this part of the American social contract, then it’s likely that the share of income flowing to the bottom 90 percent of the nation would collapse even further. The result would be even more severe economic inequality. Over the long-term, and combined with other causes of income inequality, it would mean economic stagnation, and perhaps even lead to a deflationary spiral.

Darwin Bond-Graham, a contributing editor to CounterPunch, is a sociologist and author who lives and works in Oakland, CA. His essay on economic inequality in the “new” California economy appears in the July issue of CounterPunch magazine. He is a contributor to Hopeless: Barack Obama and the Politics of Illusion

   

Reuters: Texas hedge fund billionaire seeks California pension reform

Texas hedge fund billionaire seeks California pension reform
Tue, Jun 25 12:11 PM EDT

By Tim Reid, Reuters

LOS ANGELES, June 25 (Reuters) - Texas hedge fund billionaire John Arnold is taking his campaign to reform America's public pension systems to California, pension reform groups and a spokesman for his foundation told Reuters.

Arnold, the founder of Houston-based hedge fund Centaurus Advisors and a former trader at Enron, the defunct energy company, is looking to fund groups supporting ballot initiatives that would scale back what critics regard as overly lavish public employee pension deals.

Unfunded pension liabilities for U.S. states - the difference between what they have promised workers for their retirement and the assets they have to pay for them - have risen to a total of more than $1 trillion, according to the latest analysis from the nonpartisan Pew Charitable Trust.

The issue is especially acute in California, where public employee pensions have exceptionally strong legal protections even as many local governments and state agencies struggle with chronic budget deficits.

Two California cities, Stockton and San Bernardino, have filed for bankruptcy protection in part because of soaring pension costs.

Arnold, 38, amassed a personal fortune estimated at $3 billion running Centaurus, a natural gas trading hedge fund he established after leaving Enron shortly before it collapsed in 2001.

Last year he closed Centaurus as natural gas prices hit a slump and turned full-time to running a philanthropic foundation with his wife, Laura. According to the John and Laura Arnold Foundation, the fund has assets of $1.2 billion.

The foundation's stated goals on its website are improving outcomes for criminal justice, education, public accountability and research integrity.

"The cost of public employee benefits in most states and communities is unsustainable," the website states.

According to the Federal Election Commission database, Arnold gave money to Barack Obama's presidential campaign in 2007 and 2008. He also gave money to other Democratic politicians, and the committee that funds Senate campaigns for Democrats.

The foundation has spent about $10 million in the past two years backing pension reform efforts in 25 jurisdictions, according to Josh McGee, the foundation's vice president for accountability.

McGee did not specify what those jurisdictions were but said the efforts included support for groups that successfully backed pension reform packages in Rhode Island and Kentucky, where laws that cut benefits for current and new workers were passed.

McGee attended a private "pension retreat" in Sacramento on May 22 where California city officials, lawyers and taxpayer groups concerned with pension debt shared information and plotted strategy.

He stressed that no decisions by the Arnold Foundation had been made over whether, or how, to deploy funds in California.

"We don't want to do a bunch of one-off efforts," he said. "We want to see if we can build momentum for a sustained reform effort in the state, and nationally."

Two pension reform advocates in California say they have received calls from officials at the Arnold Foundation in recent weeks asking about ballot initiatives.

McGee said he attended the May 22 retreat as part of an "outreach effort" as the foundation looks at ways to approach pension reform in California.

He said the foundation is interested in fairness for workers as well as employers. The foundation's website said efforts must be fair to "all parties."

Unions, however, are not necessarily happy with Arnold's involvement with pension reform.

"It's the height of narcissism for a Texas billionaire who doesn't have to worry about his retirement to come into California and try to meddle with the secure retirement of working-class people," said Lowell Goodman, communications director for the southern California chapter of the Service Employees International Union.

A request for comment by Arnold was made through McGee, but was declined.

   

Courthouse News Service: Attorney Just Made Things Worse, Client Says

Courthouse News Service: Attorney Just Made Things Worse, Client Says
By MATT REYNOLDS


SAN DIEGO (CN) - A former San Diego County pension fund officer claims in court that a publicity-hungry attorney defrauded him and cost him his job by persuading him to leak documents about pension fund investments to the San Diego Union Tribune.

Jeffrey Baker sued the San Diego law firm Aguirre Morris Severson, and his former attorney Michael Aguirre in Superior Court, alleging legal malpractice, fraud and five other counts.
    
Baker also sued the law firm's partner Christopher Morris.

Read more: Courthouse News Service: Attorney Just Made Things Worse, Client Says

   

U-T San Diego: Pension costs squeeze San Diego budget

U-T San Diego: Pension costs squeeze San Diego budget
Annual payment up $44M from last year
http://www.utsandiego.com/news/2013/jan/11/san-diego-pension-payment-increases/

By Craig Gustafson

Jan. 11, 2013

The city’s budget continues to get squeezed with news that the voter-mandated switch from pensions to 401(k)s has pushed San Diego’s annual pension payment to $275 million for the coming fiscal year, an increase of $44 million from a year ago.

The sharp increase was expected given the pension fund’s lackluster investment returns and the passage of Proposition B by city voters in June, and it reaffirms the city faces a budget deficit approaching $40 million and possible cuts to services that were restored just last year.

Proposition B, which replaced guaranteed pensions with 401(k)-style plans for all new hires except police officers, is the main driver of the cost increase. The city has to ramp up payments because it is closing the pension system to the vast majority of its future workers. The pension actuary said the initiative was responsible for $27 million of the overall $44.3 million increase.

Investment returns also played a role. The fund projects an average return of 7.5 percent, but, for the fiscal year that ended June 30, the returns were 0.9 percent. The poor performance increased the city’s payment by $8.3 million.

Read more: U-T San Diego: Pension costs squeeze San Diego budget

   

Huffington Post: 5 Myths About Public Employee Pensions

BY Harold Schaitberger
General President, International Association of Fire Fighters
http://www.huffingtonpost.com/harold-schaitberger/public-employee-pensions_b_1665029.html

Posted: 07/11/2012 12:36 pm


There's an oft repeated myth being fed by many that claims the defined benefit pension plans available to most public employees are going bankrupt.

While a new report by the Pew Center for the States feeds those myths, Pew's research paints a false picture of pensions. Here are five oft-peddled myths about public pensions followed by the facts.

1. Pensions are going bankrupt.

The methods used to calculate a pension system's funding level are quite complicated and convoluted, which has enabled detractors to point to the funds in a few states -- Illinois, Rhode Island, Connecticut and Kentucky -- where funding shortfalls are notably higher.

Read more: Huffington Post: 5 Myths About Public Employee Pensions

   

San Diego Business Journal: County Pension Fund Boasts 6.42 Percent Return

San Diego Business Journal: County Pension Fund Boasts 6.42 Percent Return
County Pension Fund Boasts 6.42 Percent Return
By Mike Allen Monday, August 27, 2012

The San Diego County Employees Retirement Association said its $8.6 billion pension fund’s annual return for the fiscal year ended June 30 was 6.42 percent.

The fund beat 95 percent of all public pension funds with assets above $1 billion, according to the Trust Universe Comparison Service, the county retirement fund said.

It was also in the top 5 percent of all funds for one, two and three year periods, with a portfolio of lower than median risk, SDCERA said.

Read more: San Diego Business Journal: County Pension Fund Boasts 6.42 Percent Return

   

Sacramento Bee: California pension fund earnings outpaced other states in 2011

Sacramento Bee: California pension fund earnings outpaced other states in 2011
August 9, 2012

California's state-managed public employee retirement systems appear to have outpaced those of other states in 2011 investment earnings, according to a new Census Bureau report.

The annual statistical report reveals that California pension funds' $433.3 billion in assets were 17 percent of all state-managed retirement systems' assets, but that California's investment earnings of $82.4 billion were 20 percent of all earnings.

The three largest California funds are the California Public Employees Retirement System, the California Teachers Retirement System and the University of California's pension system.

The California funds received $19.1 billion in contributions - $13 billion from government employers and $6.1 billion from employees - last year, according to the report. They served 1.9 million active and inactive members, and paid out $27.9 billion in benefits and other payments to 847,135 retirees.


Posted by Dan Walters

© Copyright The Sacramento Bee. All rights reserved.

   

Mercury News: State Auditor calls San Jose pension estimates 'unsupported'

Mercury News: State Auditor calls San Jose pension estimates 'unsupported'

By John Woolfolk
Posted:   08/22/2012 07:28:05 AM PDT
SAN JOSE -- The California State Auditor on Tuesday reported San Jose "likely overstated" that its future pension costs could reach $650 million by 2015, a figure the audit called "unsupported" and which the mayor cited early last year in building the case for a ballot measure to reduce retirement benefits.

Read more: Mercury News: State Auditor calls San Jose pension estimates 'unsupported'

   

San Francisco Chronicle: Pension reform not priority with voters, poll says

San Francisco Chronicle: Pension reform not priority with voters, poll says
By Wyatt Buchanan
Published 12:03 a.m., Tuesday, July 10, 2012

Sacramento -- California voters are not overly concerned about the level of pension benefits for public employees and oppose stripping collective bargaining rights from public-sector unions, according to a Field Poll released Tuesday.

The poll found that 37 percent of registered voters surveyed think pension benefits for public workers are too generous, 36 percent believe the benefits are about right, and 17 percent think they are not generous enough. Ten percent had no opinion.

Read more here.

   

Fox and Hounds: Pension Reform Needs to Be Done Right, Not Just Right Now

Fox and Hounds: Pension Reform Needs to Be Done Right, Not Just Right Now

By Jonathan Karpf
Professor of Anthropology, San Jose State University
Thursday, July 5th, 2012

Those who loudly shout that California needs pension “reform” now, now, now (“Legislature Must Go All-the-Way with Pension Reform,” Fox&Hounds, 7/3/12) illustrate exactly what is wrong with the public debate on government employees’ retirements: critics scream for quick action and work to create a hysteria, but provide no tangible solutions.

Read more: Fox and Hounds: Pension Reform Needs to Be Done Right, Not Just Right Now

   

CRS Chairman Dave Low in the Los Angeles Times: Public pension security for California

Los Angeles Times Op-Ed
Public pension security for California
Public employees will negotiate on retirement plans, but workers must be protected
By Dave Low

November 29, 2011
When the Legislature reconvenes next month, one of the front-and-center issues will be public pension restructuring. California's public employee unions intend to be vigorous participants in this effort. It is important to note, though, that unions have long been active in negotiating changes at both the state and local levels that have reduced public costs while continuing to ensure decent retirements for public workers.

These changes include increasing employee contributions and reducing pension formulas, which have already eased state budget costs by $600 million over the last two years. Similar changes are being negotiated in more than 200 California cities, counties and local districts, where public employees have agreed to pay more into pension plans, reduce benefits and lower costs.

Meanwhile, the sky is not falling, even though public pension foes have been issuing Chicken Little warnings about the collapse of the treasury if large and immediate cuts are not made to the entire pension system. Public employee pension contributions take up just 3% of the state budget. That's less than the 3.8% of state and local budgets contributed to public pensions nationwide, according to the Center on Budget and Policy Priorities.

Gov. Jerry Brown has laid out a 12-point redesign plan that is a good starting point for the debate and that would bring significant changes. Some changes we see as beneficial, including curbing the practice of pension spiking, which balloons salaries for soon-to-retire workers to puff up their pensions based on those salaries; and double dipping, which is when a worker collects a state pension while working at a new public sector job. Others, such as the proposed shift to a less financially secure hybrid pension structure and the call for a substantial increase in full retirement age, are more worrisome.

The shift to a hybrid plan — combining a smaller secure, defined-benefit plan with an insecure 401(k)-type plan — would put employee retirement savings at significant risk. The 401(k)-type plans have higher administrative costs than traditional plans, according to Benefits and Compensation Digest. They would bring potentially lower returns and, during economic downturns, could deprive the state economy of steady revenue from retirees who have dependable pension income.

A study for the Brookings Institution found, for instance, that traditional plans, such as the ones public employees now have, outperform 401(k)-type plans by 0.8% a year. Over 30 years this is a 25% difference in total return. That's a hefty margin and could well mean the difference between a reasonably secure retirement and a life on the edge, likely dependent on public assistance to survive.

Everyone with a 401(k)-type investment has experienced the volatility of the stock market in recent years. Pension funds such as CalPERS are run by experts and invest over the long term. They can weather these drops by averaging gains and losses over time. But if the market hits a bad patch at the time a worker plans to retire, there is no time under a 401(k) plan for that worker's savings to recover.

Moreover, CalPERS reports that state-level defined-benefit pensions — with their steady flow into the economy — generate $26 billion in economic activity yearly, a secure investment in our economy, particularly in these troubled times. If that money were coming instead from the returns of 401(k) investments, its earnings and the economic activity they generate would fall with the market.

Raising the retirement age is equally unwise. Studies show that increasing the retirement age disproportionately harms low-wage workers and people of color. Forcing workers to either work longer or retire early on reduced pensions can lead to more people using taxpayer-funded social services. Retirement age should not be one-size-fits-all. It should be negotiable and depend on the rigors and needs of the job.

The public depends on the physical ability of police, firefighters and other first responders to do their jobs. So safety retirement plans let them retire early, before that vigor declines. But the efforts of all public workers contribute to the public well-being, and those workers also should be able to retire on a decent pension when age makes them unable to continue to do their jobs effectively.

Public employees have bargained in good faith to achieve the changes that are already improving the state's pension picture. We are ready and willing to discuss other proposals that will continue to boost the stability and affordability of public pension funds.

The public has a right to be indignant about six-figure public pensions, though they go to just 2% of retired public workers, mostly high-level administrators. But the rising retirement crisis in America stems not from mostly modest public workers' pensions, which for state workers average just $25,000 a year, but from the alarming deterioration of private sector pensions.

With a new UC Berkeley study showing that half of Californians will retire at or near poverty levels, it is crucial that we work together for retirement security for everyone — in the public and private sector alike.

Dave Low is chairman of Californians for Retirement Security, a coalition of more than 1.5 million Californians representing public employees and retirees.

   

NBC Investigation: San Jose Pension Estimates Questioned

San Jose Pension Estimates Questioned

Have San Jose officials used fuzzy math to estimate future pension costs?
February 11, 2012
By Jenna Susko, Julie Putnam and Mark Villarreal

Description: Internal emails and documents show some fuzzy math behind pension cost projections used to sell a fiscal disaster in San Jose.

Internal emails and documents show some fuzzy math behind pension cost projections used to sell a fiscal disaster in San Jose.

In the city of San Jose, ‘budget’ is the word on the street and echoing through City Hall.

Salaries have been slashed, services cut and employees have been shown the door over the past year.

It's all in a valiant effort to dodge a potential financial crisis.

But is it an exaggeration?

The NBC Bay Area Investigative Unit obtained internal emails, memos and documents which reveal city leaders have not been straightforward when it comes to projected retirement pension costs for San Jose.

Our investigation found the math behind the headlines isn’t adding up.

In the 10th largest city in the country, it’s not surprising that retirement costs are predicted to increase in the next few years.

Mayor Chuck Reed has made sure the public is aware of the urgency in taking action to prevent these future financial burdens.

In his February state of the city address, he says, reforms are needed to " avert fiscal disaster."

Mayor Reed made the media rounds over the last year on TV and in articles like this one, in magazines like Vanity Fair, where he is quoted as saying the projected retirement costs for the city of San Jose could reach $650 million by 2015.

He called the budget “public enemy number one,” in his state of the city. In September he said “San Jose is in a crisis. We have a fiscal emergency a service-level emergency, all driven by sky-rocketing retirement costs.”

He said in multiple press releases, that retirement costs could soar to $650 million by 2015

The mayor took steps to declare a fiscal emergency, which meant pension reform could then head to the ballot.

That sent unions to the bargaining table to decide on the details of how much they would be willing to cut from their pensions to save the city from going under.

Read more: NBC Investigation: San Jose Pension Estimates Questioned

   

CRS Ron Cottingham in the North County Times


FORUM: Public pensions not the problem
By Ron Cottingham
in the North County Times
http://www.nctimes.com/news/opinion/commentary/forum-public-pensions-not-the-principle-problem/article_b25021f3-92f7-5ea5-ba0a-0cf1f9da9aed.html

Unions intend to be active in restructuring pensions to reduce costs while ensuring decent retirements for public workers. This is not a new role for the unions, though.

In the past two years alone, we have negotiated a host of agreements that saved the state $600 million by agreeing to pay more for pensions while trimming benefits and lowering costs. Negotiations in more than 200 California counties, local districts and cities including Escondido and San Marcos are bringing similar savings.

Dire "Chicken Little" warnings suggest that the state treasury will collapse if major pension cuts aren't made. But the sky is not falling. Only 3 percent of California's budget goes for pension contributions, a far smaller percentage than the 3.8 percent national average, according to the Center on Budget and Policy Priorities.

The governor's 12-point pension redesign plan is a good debate starting point, calling for significant changes, some constructive, such as curbing pension spiking and double dipping, others more worrisome, such as shifting future pensions to an insecure hybrid structure and substantially increasing full retirement age.

The hybrid plan, combining a smaller secure traditional pension with an insecure 401(k)-type plan, would jeopardize retirement. Experience shows it would increase administrative costs, lower returns and deprive the state economy of dependable pension income during economic downturns.

Continuing market volatility makes hybrids risky. Public funds like CalPERS are run by experts and invest over the long term, averaging gains and losses to weather volatility. With 401(k)-style accounts, if the market hits the skids when a worker plans to retire, there is no time for savings to recover.

Traditional plans outperform defined contribution plans by 0.8 percent a year, says the Brookings Institute, producing 25 percent greater returns over 30 years, a substantial margin possibly spelling the difference between a reasonably secure retirement and a life on the edge, likely dependent on public assistance to survive.

CalPERS reports traditional pensions, flowing steadily into the California economy, generate $26 billion in economic activity yearly, a constant positive, particularly in turbulent times. However, 401(k)s guarantee no such stability, almost certainly falling along with the market, taking the economic activity they generate down with it.

Raising the retirement age is equally ill-advised. Studies show doing so disproportionately harms low wage workers and people of color. More workers would likely retire early on reduced pensions, and be dependent on taxpayer funded social services. Retirement age should be negotiable. A one-size-fits-all retirement would pay no heed to the rigors and needs of the job.

Public safety work is particularly demanding, calling for strength and stamina. So safety retirement plans let police, firefighters and other first responders retire early before abilities decline. But public well-being depends upon the contributions of all public workers and all should be able to retire on a decent pension when age makes them unable to continue effectively in their jobs.

Modest public pensions aren't the cause of the retirement crisis in America. It stems from the alarming deterioration of private-sector pensions. It is crucial that we work together for retirement security for everyone ---- public and private sector workers alike.


Ron Coittingham is president of the Peace Officers Research Association of California in Sacramento.

Read more: http://www.nctimes.com/news/opinion/commentary/forum-public-pensions-not-the-principle-problem/article_b25021f3-92f7-5ea5-ba0a-0cf1f9da9aed.html#ixzz1f2mIomtR

   

CRS Chairman Dave Low in the Sacramento Bee: Public employees support pension fix

Sacramento Bee: Another View: Public employees support pension fix
Published: Sunday, Oct. 23, 2011 - 12:00 am | Page 2E

Dave Low, chairman of Californians for Retirement Security, is responding to The Bee's Oct. 19 editorial, "Pension reform needs a green light from Brown." That editorial stated, "If Brown and lawmakers don't enact serious pension reform soon, a disgusted public will impose its own harsh fix."

Next week, Gov. Jerry Brown and the Legislature are slated to begin a timely and deliberate recrafting of California's public pension system aimed at ensuring the system's stability and long-term affordability. Instead of bowing to political pressures from anti-labor groups and blaring headlines about the 2 percent of pension recipients who receive more than $100,000 per year, they intend to take a careful and thorough look at ways to ensure that Californians have the long-term retirement security we all deserve.

Read more: CRS Chairman Dave Low in the Sacramento Bee: Public employees support pension fix

   

UC Berkeley Study: Half of Californians will Retire in Poverty

Young people more likely to retire in poverty, according to study

By Christopher Yee | Staff
This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Monday, October 3, 2011

Approximately half of California workers will retire in or near poverty, according to a study published Monday by the UC Berkeley Center for Labor Research and Education.

The study details the fiscal consequences of the decline in secure retirement plans offered by California employers. In the past, many employers offered defined benefit pension plans, which guarantee monthly payments based on salary before retirement and length of time employed. Now, most California employers either offer 401K accounts, which force employees to invest for themselves, or do not offer any sort of retirement plan.

Nari Rhee, associate academic specialist at the labor center and editor of the study, said that money in 401Ks is at risk if the market does not do well or if a person invests poorly.

Read more: UC Berkeley Study: Half of Californians will Retire in Poverty

   

KPSP Local: Pension Truth Squad Comes to Valley

Reported by: Arti Nehru
Published: 8/16 5:52 pm

A couple dozen retired state workers and members of Californians for Retirement Security's Pension Truth Squad gathered outside Palm Springs City Hall Tuesday to speak out in favor of public employee retirement. The rally was strategically planned at a time when state lawmakers are considering proposals to gut public pensions in California.

The Pension Truth Squad is making stops around the state to raise awareness about public employee retirement. Palm Springs was the seventh stop.

"During the time I was employed, every paycheck - 8 percent of my salary went into CalPERS retirement," said Margret Thompson. Thompson worked as a police and fire dispatcher for 30 years before she retired.

Like other state workers, Thompson has a pension that was partly paid for by her and partly by public tax dollars. She joined other members of the Pension Truth Squad in Palm Springs to get across this message:

"I think it's quite unfair that the general public thinks all of us are making great amounts of money, which we are not," said Thompson.

But those public pensions are upsetting some tax payers who don't have a pension themselves.

"Why should A be paying for their pension and putting my tax dollars into their pension?" asked Elizabeth Mendiola of Palm Springs.

Mendiola wants to see the more costly pensions decrease.

As it stands, Palm Springs is about $48-million short of its long term pension funding obligations. And that deficit could grow. Many cities are in the same situation.

"I believe there should be some sort of reform," said Mendiola.

As the debate continues, the Pension Truth Squad plans to continue to make more stops around the state to take a stance in favor of public employee retirements.
Copyright 2011 Desert Television LLC All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

   

The Maddy Report Discusses Public Employee Unions

"The Maddy Report" television program on Central Valley PBS has aired a five-part series on public sector pensions.  View the series below:

Part 1 Unions in the Public Sector:
http://www.youtube.com/watch?v=qL3sXw37MJE

Part 2 Public Safety Pensions:
http://www.youtube.com/watch?v=wgA9hVH4Hqs

Part 3 Jon Ortiz and Dan Walters:
http://www.youtube.com/watch?v=fkn15kEve8E

Part 4 Losing Clout?:
http://www.youtube.com/watch?v=Ns1AEPZu6_I

Part 5 Thoughts from the Editor:
http://www.youtube.com/watch?v=BtQM--nc4bk

   

KPSP Local 2: Pension Truth Squad Comes to Valley

Reported by Arti Nehru
August 16, 2011

A couple dozen retired state workers and members of Californians for Retirement Security's Pension Truth Squad gathered outside Palm Springs City Hall Tuesday to speak out in favor of public employee retirement. The rally was strategically planned at a time when state lawmakers are considering proposals to gut public pensions in California.

The Pension Truth Squad is making stops around the state to raise awareness about public employee retirement. Palm Springs was the seventh stop.

Read more: KPSP Local 2: Pension Truth Squad Comes to Valley

   

Palm Springs Desert Sun: Statewide effort counters drive to slash budget

By Coburn Palmer, The Desert Sun
August 17, 2011

Two dozen people from the Pension Truth Squad gathered on the sidewalk outside Palm Springs City Hall on Tuesday as part of a statewide campaign to stop a pension system overhaul for California's public employees.

Teaching, public safety and other retirees shared their stories in an effort to dispel what they said is a myth that public employees retire with extraordinary benefits.

Read more: Palm Springs Desert Sun: Statewide effort counters drive to slash budget

   

Sacramento Bee: Study calculates savings from 'pension reform' proposals

By Jon Ortiz
August 12, 2011

A study bankrolled by a Texas billionaire concludes that shifting more contribution costs to employees, switching to a federal-style "hybrid" retirement plan and other changes could save state and local governments billions of dollars each year.

The California Foundation for Fiscal Responsibility received $150,000 from John D. Arnold to pay for the report, according to Bloomberg.

Arnold is a former Enron trader who made his fortune by buying and selling natural gas. Enron, the now-defunct Houston energy company, played a major role in California's energy crisis 11 years ago. Arnold's trades reportedly had little impact on that scandal.

Read more: Sacramento Bee: Study calculates savings from 'pension reform' proposals

   

Bloomberg: Enron Billionaire Bankrolls California Advocate for Public Pension Changes

By James Nash - Aug 11, 2011

John D. Arnold, a former Enron Corp. trader in Texas who became a billionaire by buying and selling natural gas, is bankrolling a group supporting changes to limit California’s pension-fund obligations.

Arnold, who formed hedge fund Centaurus Advisors LLC in Houston after leaving Enron, started a foundation that Meredith Simonton, a spokeswoman, said has given $150,000 to the California group.

The organization set up by Arnold and his wife, Laura, a lawyer, plans to be involved in pension-overhaul efforts around the U.S., Simonton said by telephone from Houston. State and local governments confront “massive financial distress” from the gap between assets and promised benefits, she said.

Read more: Bloomberg: Enron Billionaire Bankrolls California Advocate for Public Pension Changes

   

Calaveras Enterprise: CalPERS benefits stimulate economy

By Brionna Friedrich
Wednesday, August 10, 2011

The California Public Employee Retirement System (CalPERS) has come under fire in recent years as budget cuts have become more and more severe, with accusations ranging from financial insolvency to excessive payouts to retirees.

CalPERS is coming to its own defense, with a recent study claiming its $11.57 billion in 2010 benefits payments spurred an additional $14.62 billion in economic activity for a total of roughly $26 billion in economic benefit.

Read more: Calaveras Enterprise: CalPERS benefits stimulate economy

   

Capital Public Radio: Pension Overhaul Efforts Face Big Hurdles

By Ben Alder
Capital Public Radio
Monday, August 01, 2011

Of all the Republican priorities during state budget negotiations this year, the issue that drew the most heat might actually face some of the longest odds against dramatic change.  We're talking about pensions -- and in the latest topic in our "Beyond the Budget" series, we examine the challenges to a major pension overhaul both inside the Capitol building and out.


INSIDE THE CAPITOL

Democrats control the Capitol - so inside the building, they control the pension debate.  Senate Leader Darrell Steinberg says Democrats are committed to reforms:

Steinberg: "Public pensions need to be reasonable. And where they're not reasonable, we need to deal with that. And that's what we'll do."

Steinberg wants to deal with abuses like spiking and double-dipping.  He's also looking at the practice of buying "airtime," where public employees can purchase pension credits for years they haven't worked.  He doesn't support a complete overhaul - nor do labor leaders like Terry Brennand with the Service Employees International Union.

Read more: Capital Public Radio: Pension Overhaul Efforts Face Big Hurdles

   

Sacramento Bee: Six factors are working against getting a statewide public pension "reform" initiative on the ballot next year:

By Jon Ortiz
This e-mail address is being protected from spambots. You need JavaScript enabled to view it The Sacramento Bee
Published: Thursday, Jul. 21, 2011 - 12:00 am | Page 3A

The GOP minimized it. During budget talks, Democrat Gov. Jerry Brown offered to trade a pension reform initiative for Republicans backing tax extensions on the same ballot. The GOP balked, undercutting the argument that pensions are Budget Enemy No. 1.

Unions have bargained reductions. A CalPERS survey found that roughly 180 California cities and counties have proposed or enacted changes, including higher employee contributions and lower pension promises to new hires.

State employee unions negotiated both in their last contracts, cutting California's 2011-12 employer pension bill by about $400 million, CalPERS calculates.

Read more: Sacramento Bee: Six factors are working against getting a statewide public pension "reform" initiative on the ballot next year:

   

Fresno Bee: Public employees/retirees say their pensions are fair

Fresno Bee - July 15, 2011

Local public-sector employees and retirees went on the offensive Friday morning in downtown Fresno, saying their pensions are being unfairly targeted by politicians and critics.

At a news conference on the public sidewalk in front of City Hall, Fresno Police Officers Association President Jacky Parks said state lawmakers and the media are pandering to citizens' emotions by blaming public-sector pensions for the budget crisis.

Using his own union as an example of how public-sector unions work in general, Parks said Fresno police officers help fund their own retirement program. Parks said the officers are not part of Social Security.

Read more: Fresno Bee: Public employees/retirees say their pensions are fair

   

Sacramento Bee Viewpoints: Public pension vitriol is in fashion – and unfair

Read more: Sacramento Bee Viewpoints: Public pension vitriol is in fashion – and unfair

   

Sacramento Bee State Worker Blog: Biggest obstacle to pension reform may be pension reformers

By Jon Ortiz
This e-mail address is being protected from spambots. You need JavaScript enabled to view it The Sacramento Bee
Published: Thursday, Jul. 7, 2011 - 12:00 am | Page 3A
Sacramento Bee State Worker Blog: Biggest obstacle to pension reform may be pension reformers

In the last year, a group zealously leading the charge for pension rollbacks has split into two groups. Although one is a foundation that can't legally run political campaigns and the other exists solely for that purpose, they're vying for attention and competing for cash.

Read more: Sacramento Bee State Worker Blog: Biggest obstacle to pension reform may be pension reformers

   

Sac Bee State Worker Blog: Union coalition hammers latest pension study

Californians for Retirement Security has blasted a new study that estimates public pension obligations will cost American households nearly $1,400 per year for the next 30 years. (We told you about the study in this Thursday post.)
The union coalition e-mailed a response to The State Worker this morning that we're posting here, unedited:
 
Friday, June 24, 2011
To: Jon Ortiz, Sacramento Bee
From: Californians for Retirement Security
Re: CRS response to Rauh Novy-Marx Study
 
Here is a response from Dave Low, Chairman of Californians for Retirement Security, to the questionable projections in the Joshua Rauh and Robert Novy-Marx Study referenced in the State Worker Blog:
 
"This new study is based on unrealistic assumptions about the growth of the economy and questionable projections about public pension funds. The conclusion that a tax increase is needed to pay for pensions is pure fiction, and amounts to nothing more than a cheap scare tactic. There is no requirement that pensions be funded at 80 percent, and there is no requirement or financial argument that funds must be raised to pay any additional contribution this year. Pension funded status is not a static number, it fluctuates with the market, demographics, benefits and employee and employer contribution levels."

Read more: Sac Bee State Worker Blog: Union coalition hammers latest pension study

   

Sac Bee: Unions challenge 'pension-gutting agenda' amid budget talks

Sac Bee: Unions challenge 'pension-gutting agenda' amid budget talks
June 14, 2011

Dave Low, chairman of the union-backed Californians for Retirement Security, on Monday criticized Republicans for stalling an agreement on the state budget to advance proposals he said remain "non-starters" for his group.
In response to Monday's release of a list of pension, regulatory and spending reforms sought by a group of four Republican senators, Low said in a statement it was unconscionable for a few Republicans to push a "pension-gutting agenda" while "holding the state budget hostage." The Legislature faces a Wednesday deadline to pass a balanced budget.
Specifically, Low said later in an interview that the union coalition continues to oppose mandatory hybrid plans for new hires. If Democrats adopted that idea and the other pension changes that the Republicans want, his group would spend money to defeat the ballot measure carrying the reform, he said.

"We shouldn't strike a horrible deal for a temporary tax extension," Low said. "It's simply a non-starter. The Republicans completely ignore all the concessions that have already been made by public employees up and down this state."

Read more: Sac Bee: Unions challenge 'pension-gutting agenda' amid budget talks

   

Voice of San Diego: The 401(k)'s Sticker Shock

The 401(k)'s Sticker Shock

Posted: Sunday, June 5, 2011 3:55 pm

It's almost accepted as an article of faith that killing pensions and replacing them with 401(k)-style retirements for most new employees will help the city of San Diego's budget woes. The plan is the centerpiece of a high-profile ballot initiative planned for next June that its proponents, Mayor Jerry Sanders, Councilman Carl DeMaio and other Republican and business interests, touted as saving more than $2 billion when they announced it two months ago.

But an inconvenient detail has hovered over the measure for a while: 401(k)s may not do anything to affect San Diego's massive pension deficit, and in the short term, force the city to pay more to fund it. That detail has become more inconvenient recently.

Read more: Voice of San Diego: The 401(k)'s Sticker Shock

   

San Francisco Chronicle: Bargaining, not balloting, to fix Oakland pensions

Bargaining, not balloting, to fix Oakland pensions

San Jose Mayor Chuck Reed has pledged to rein in city worker pensions, a plan that might require going to voters. In San Francisco, Mayor Ed Lee, working closely with union leaders, has announced a pension reform plan for voters to decide in November.

But, in Oakland, Mayor Jean Quan has no intention of taking pension reform to the ballot box. She says changes will come voluntarily from city unions.

"We're talking about pension changes, and we're doing it at the negotiating table," she said.

Read more: San Francisco Chronicle: Bargaining, not balloting, to fix Oakland pensions

   

Capitol Weekly Opinion: Time for the pension-reform boogeymen to face the facts

By Brian Moriguchi | 06/02/11

Capitol Weekly

Why are public pension foes still on a tear, raising red flags and trotting out pension boogymen as if this were still 2008?

The question is worth asking since California’s public pension plans are again in good health after weathering the market crash of the Great Recession. All across California, at the state level and in more than 90 local jurisdictions, firefighters, police, teachers and other public employees have worked with government leaders to develop stable and sustainable retirement systems and to ensure they are affordable and fair for taxpayers and retirees. This collaborative effort exemplifies the effectiveness of collective bargaining and the desire of public employees to be part of the solution, not part of the problem.

Read more: Capitol Weekly Opinion: Time for the pension-reform boogeymen to face the facts

   

SALINAS CALIFORNIAN SPECIAL REPORT: Average Monterey County pensioners may not warrant the headlines

SALINAS CALIFORNIAN: Average Monterey County pensioners may not warrant the headlines

By LESLIE GRIFFY
May. 20, 2011|

Public employee pensions are in the crosshairs as headlines tell stories of large payouts and governments scramble to cover increasing benefit costs while facing record deficits.

In Monterey County alone, Salinas Valley Memorial Healthcare District's ex-chief executive officer Sam Downing's $4.9 million in pension bonuses and severance has sparked a state audit.

But when The Salinas Californian examined a sampling of pension payments to former employees of Monterey County agencies, it found that a small cadre of retirees take home more than $100,000 a year. Most get much less.The average pension payout for a retired public employee who worked in Monterey County is a little more than $19,000 a year, comparable to the region's median income.

Read more: SALINAS CALIFORNIAN SPECIAL REPORT: Average Monterey County pensioners may not warrant the headlines

   

Sacramento Bee State Worker Blog: Niello abandons pension initiative

Former Republican Assemblyman Roger Niello said he will not pursue a signature-gathering campaign for his pension reform proposal because of the diminishing likelihood of a special election on taxes later this year.

"Our urgency is gone," he said. "The reason for filing this measure was to have something in line for a November election alongside the measure on taxes, but that appears unlikely to happen now."

Read more: Sacramento Bee State Worker Blog: Niello abandons pension initiative

   

Riverside Press-Enterprise: Labor coalition counters what it calls pension myths during Riverside stop

Gathered on the steps of the County Administrative Center in Riverside, the group said most public retirees receive modest pensions and do not receive lavish six-figure retirements.

"We would like to dispell some of the myths about public employee pensions," said Alen Ritchie, a retired Redlands teacher and current member of the San Bernardino County Board of Education.

"Teachers do not go into the profession for money, but we do deserve a livable retirement," said Ritchie, 71.

Publc employee pensions have become a hot topic at the state and local level. Legislative Republicans are pushing pension changes as a way to help solve the state's ongoing fiscal woes. And in Riverside County, supervisors are working to create a second tier of benefits for newly hired employees and are asking current workers to pay more toward their own retirement.

Read more: Riverside Press-Enterprise: Labor coalition counters what it calls pension myths during Riverside stop

   

Teachers, Women & Americans Need Pensions

May 13, 2011: NIRS submits a letter to the New York Times disputing claims that it makes sense to water down pensions for teachers.

To the Editor:

It’s encouraging that The New York Times confirms that retirement benefits for California teachers are modest, despite frequent claims that public pensions are excessive. Unfortunately, the reporting falls apart quickly when it gives credibility to a flawed report by the California Foundation for Fiscal Responsibility indicating that teachers would be better off with a watered down pension plan.

Here are some important facts the story failed to examine when it took a flawed study at face value.

Defined benefit pensions are the most cost-efficient way to provide a retirement income – they can provide the exact same benefit at nearly HALF the cost of defined contribution (DC) plans. Part of this cost savings comes from the fact that pensions are professionally managed. This enables them to earn returns that consistently exceed the returns in DC plans by more than one percent annually – a fact that the study gets wrong.

Read more: Teachers, Women & Americans Need Pensions

   

Capitol Weekly Opinion: Corporate, right-wing interests demonizing public workers’ pensions

By Allan Clark

Al and Wilma Diggle live in a mobile home on a small swath of desert in the town of Inyokern, Calif. They drive an 11-year-old station wagon, and the total $1,500-a-month pension for each working more than a decade at public schools barely covers their health bills.

Theirs is the typical story of many teachers and school employees, janitors, cops, firefighters and nurses who carry on the daily work of educating, protecting and serving the public. And theirs is the story that the right-wing and corporate interests who are attacking public pensions in California don’t want you to hear.

This week, the so-called California "Foundation" for Fiscal Responsibility, a group bankrolled by a mysterious out-of-state billionaire, trotted out its latest ammunition in its attack: a flawed report on California pensions. The report - masquerading as a legitimate study – in fact is a political document that relies on outdated and skewed data that provides an inaccurate view of retirement benefits for public employees. It breaks no new factual ground, having drawn most of its conclusions from two-year-old data from the Little Hoover Commission’s roundly criticized report on pensions. Read more here.

Read more: Capitol Weekly Opinion: Corporate, right-wing interests demonizing public workers’ pensions

   

California Public Fund Says Stocks Led Investment Gain of 18.6%

By Michael B. Marois
 
May 12 (Bloomberg) -- The California Public Employees’ Retirement System, the largest U.S. pension, said it earned 18.6 percent for the first three quarters of its fiscal year, led by its stock holdings and private equity.

The $236.6 billion fund said its global equity portfolio returned 29.8 percent through March 31. Private equity earned 17.6 percent, though reporting of the results may be as much as four months behind. Read more here.

 

   

"Pension Truth Squad" and "DontScapegoatUs.com" Debut in California Pension Reform Fight

May 05, 2011
By Steven Maviglio
California Majority Report

Californians for Retirement Security launched two new efforts yesterday to fight attempts to slash retirement security for millions of middle class Californians.

While lawmakers heard legislation Wednesday to slash public pensions, Californians for Retirement Security’s "Pension Truth Squad" visited the State Capitol to share personal stories and set the record straight about the sustained attacks on public workers.

“We’ve given our fair share. Now we want a fair shake,” said Martha Penry, a special education teacher’s assistant in the Twin Rivers School District who said she will be lucky to collect $800 a month from her pension when she retires. “It is time to start telling the truth about retirement security for working families.”

She noted public employees agreed to last year’s repeal of SB 400, which saved the state $400 million and unions have been making significant concessions in local jurisdictions across the state. Just this week, more than 50,000 state employees agreed to contribute more toward their retirement to save the state $300 million. Read more here.

   

Squeezed in the Public Sector

May 9, 2011
By Andrew R. Mccllvaine, Human Resources Exeutive Blog

Government work ain't what it used to be.

Working in the public sector once offered a secure job with plush benefits. No longer.

These days, federal, state and municipal workers are seeing pay freezes, furloughs and layoffs. And on top of increased scrutiny over pay and benefits, more and more states are reconsidering collective-bargaining rights of state employees.

The cumulative effect may be tarnishing the prospect of government work for many would-be public-sector workers and curtailing the sector's ability to attract top talent.

"It is getting harder to get highly skilled individuals to join the public sector because of the uncertainty around wages and benefits going forward," says Ken Lewis, client relations director for Kenexa in Denver. Read more here.

   

POLITCAL NOTEBOOK: Pension reform group pulls rally switcheroo

May 8, 2011
Riverside Press-Enterprise

Americans for Prosperity California, a group backing pension changes, was a no-show in Riverside on Thursday afternoon -- at least at the location they first announced for their protest.

As part of its "Lifestyles of the Rich and Famous on a Government Pension" tour, the group planned to show up in a white limo at the Market Street offices of the Service Employees International Union Local 721 at 2 p.m.

The group had yet to arrive 45 minutes after the scheduled start time and a reporter decided not to stick around any longer to catch a glimpse of the limo. Read more here.

   

California corporations pay far less than nominal tax rate

May 06, 2011
By Ronald Campbell
Orange County Register
In 2010, Irvine chipmaker Broadcom earned more than $1 billion in profits but paid just $15.5 million in income taxes worldwide – a tax rate of 1.4 percent.

Broadcom's tax rate, a third of the 4.68 percent rate paid by an average family of four last year, was no fluke. Over the past five years, according to the company's public reports, it has paid a median income tax rate of 2.8 percent. Read more here.

   

Have the heroes of 9/11 become today's scapegoats?

By John Woolfolk
May 06, 2011
San Jose Mercury News


After hundreds of firefighters and scores of police officers died trying to save others in the Sept. 11, 2001, terrorist attacks in New York, thousands of miles away in San Jose, strangers would buy officers coffee or burritos and approach firefighters at the supermarkets just to thank them for doing their jobs.

Nearly a decade later, as memories of the attacks flood back into America's consciousness after terrorist leader Osama bin Laden's death, the firefighters and police officers who were 9/11's heroes are feeling the limits of a recession-battered public's support. They face pay cuts, calls to shrink their pensions and even layoffs, as city leaders and residents suggest their pay and benefits are breaking the bank.

"You go from being the darlings of everybody, who gave it all, to now where you're on the gravy train feeding at the public trough and causing all these problems," said San Jose police Lt. George Beattie, a 22-year veteran and president of the officers' union. "It's kind of a strange turn of events." Read more here.

   

The State Worker: With pensions under attack, unions fight back

May 5, 2011

Sacramento Bee

Here comes the pension push-back.

After more than three years feeling like a collective political punching bag, public employee unions have mounted a multifaceted campaign to defend their pensions and fend off "attacks" on their members.

A few events this week illustrate what's going on:

Monday: The California State Employees Association started recruiting retiree members for CalPERS "ambassadors" program, which starts later this month. Read more here.

   

Combatants in California pension battle trade blows

May 05, 2011
By Jim Christie

(Reuters) - California's largest companies spend less than a third of what the state government spends on pensions and other benefits for retired workers, a study released on Thursday concluded as a fight over the costs of public-sector pensions intensified.

The study released on Thursday says government workers, whose pensions are typically guaranteed, can expect far more in retirement than private-sector employees. That disparity is a key focus in a nationwide battle over public pensions in particular and public workers' benefits and rights in general.

"A state employee earning $60,000 annually will accumulate pension and retiree health benefits valued at $19,000 a year. A comparably paid employee of a large California company will receive retirement benefits worth less than $6,000," the study by the California Foundation for Fiscal Responsibility found. Read more here.

   

State worker group speaks out on pension reputation

May 04, 2011
By Nannette Miranda, ABC News

SACRAMENTO, Calif. (KGO) -- Government workers and retirees, who call themselves the Pension Truth Squad, held signs outside the Capitol saying they don't own yachts, Bentleys, or even mansions. They're just average folks earning small retirement checks that average $2,200 a month, hardly the headline grabbing amounts given to high earners that have sparked outrage against public workers in general.

"We're just hoping to change that image by explaining the facts, which are that public employees are not lavishly paid and compensated in retirement," said Brent Meyer from the Peace Officers Research Association.

Inside the Capitol, an Assembly committee helped the group's cause by approving a proposal to end pension abuses, especially spiking where public employees pad their last check with unused vacation and sick time and even car allowances. The proposal was a result of the Bell scandal, where former city manager Robert Rizzo stood to make $600,000 a year in retirement. Read more here.

   

Labor coalition on pensions to launch website

May 4, 2011
Sacramento Bee


At 3 p.m. today, Californians for Retirement Security will launch a new website designed to put pension reformers on the defensive. DontScapegoatUs.com fixes its criticisms squarely on eight figures (with Photoshopped horns, above) who are leading the battle to change public pensions, including Dan Pellissier, president of California Pension Reform; Marcia Fritz, executive director of the California Foundation for Fiscal Responsibility; and an "anonymous out-of-state billionaire" (represented on the website with an avatar that looks like Playboy publisher Hugh Hefner) who is reportedly backing pension change efforts. Read more here.

   

Pension reform undertaken by Assembly panel

May 04, 2011
By C. Johnson

SACRAMENTO, CA - "I couldn't afford to live on my retirement. I would get roughly $21,000 coming in a year," said retiree David Miller with the Pension Truth Squad.

Government workers and retirees who call themselves the "Pension Truth Squad" held signs outside the State Capitol saying they don't own yachts or Bentleys or even mansions.

They're just average folks earning small retirement checks that average $2,200 a month, hardly the headline-grabbing amounts given to high earners that have sparked outrage against public workers in general. Read the full article here.

   

California public employees defend 'modest' pension benefits

May 04, 2011
By Steven Harmon


SACRAMENTO -- Public employees, saying they are tired of being lumped together with the few who have been snared in pension scandals, struck back Wednesday with what they called their own "truth squad" on pensions at the Capitol.

One longtime teacher's aide at the news conference accused "out-of-state billionaires and corporate interests whose greed led to California's budget mess" of leading attacks on unions to divert the blame from themselves.

"They selectively draw attention to headlines about the few inexcusable cases of abuse," said Martha Penry, a special-education teacher's assistant who said she will be "very lucky" to collect $800 a month from her pension when she retires after 25 years. "And they continue to spread myths and falsehoods about public employee pensions." Read the article here.

   

Out of Balance?

The National Institute on Retirement Security, a bipartisan organization, finds that employees of state & local government earn an average of 11% and 12% less, respectively, than comparable private sector employees.  An analysis spanning two decades shows the pay gap between public and private sector employees has widened in recent years. Read the study here.

   

Public pension fund assets nearly $3 trillion: study

April 21, 2011
By Lisa Lambert

Reuters reports the assets held by state and local government pension funds rose to $2.93 trillion in 2010, a 35 percent increase from their lowest point during the financial crisis. Read the full article here.

   

For union families, a loss of value beyond bank accounts

April 18, 2011
By Amy Gardner

There used to be a time when firefighters and public employees were looked highly upon in our communities. But special interests are tearing them down. The Washington Post takes a look at how that’s affecting those who protect our homes, keep our streets safe, and teach our kids. Read the full article here.

   

Teacher Pensions Aren’t Budget Busters

April 14, 2011
By: Ann Bibby

Despite the anguish emanating from state legislatures about the cost of pension obligations, a recent study puts the actual cost at about 2.9% of the average state budget. The alleged gold-plated retirements that teachers and other state workers receive are not at the root of the budget problems and forcing workers to pay more into their pensions won't fix the current shortfall issues so many states face. Read the full article here.

   

Calpers Officer Urges Money Manager Pension-Bashing Donation Disclosure

Is Wall Street funding the attack on public pensions? A CalPERS memo wants to know.

April 12, 2011
By Michael B. Marois

Wall Street firms seeking to invest for the $235 billion California Public Employees’ Retirement System should disclose if they’ve supported groups critical of government pensions, one of the fund’s board members said.

Money managers trying to win business from the largest U.S. public pension should report contributions to groups advocating for dismantling public worker pension plans that guarantee benefit levels regardless of investment returns, said a Calpers board member, J.J. Jelincic, former head of one of California’s largest state worker unions.

Read more: Calpers Officer Urges Money Manager Pension-Bashing Donation Disclosure

   

Cutting public pensions now won't save California.

That’s the conclusion of the LA Times’ veteran columnist George Skelton, who points out that any pension changes won’t affect this year’s state budget bottom line.

In the long run, however, pension reform makes political and budget sense, and Brown has grabbed the initiative away from Republicans.

April 11, 2011
By George Skelton
Capitol Journal

From Sacramento

Let's be clear: State employee pensions are not to blame for Sacramento's budget deficit. Not by any math.

Read more: Cutting public pensions now won't save California.

   

CalSTRS honored by investor magazine

The CalSTRS system is strong – so strong it has been honored by Investor magazine

April 11, 2011
By: Sacramento Business Journal

The California State Teachers' Retirement System has been named Large Public Fund Manager of the Year by Institutional Investor Magazine, according to a statement from CalSTRS. Read the full article here.

   

Elias: No Wisconsin here, but California unions are taking cuts aplenty

Are public workers helping our communities and state balance their budgets? You bet. This Ventura County Star column takes a look at how public employees are making sacrifices to balanced budgets.

April 11, 2011
By: Thomas D. Elias

No Wisconsin here, but unions are taking cuts aplenty

No one in California politics believes this state is about to see anything like the unprecedented statehouse live-in occupation staged earlier this year in Wisconsin, where public employee unions faced the threat of losing not just salary and benefits, but their hard-won bargaining rights.

Read more: Elias: No Wisconsin here, but California unions are taking cuts aplenty

   

State Pension Woes: Not as Bad as They Seem?

April 11, 2011
By Sean Cavanagh

Demanding that teachers and other public workers pay more for pension benefits might score elected officials some easy political points, but it won't fix states' budget woes, argues the author of a recent essay.

The source of that opinion might surprise you. It was written by Eli Lehrer, the vice president of of the Heartland Institute, a conservative think tank. A lot of the efforts today to require higher pension contributions of workers, though not all, are being pushed by Republican governors and lawmakers.

Read more: State Pension Woes: Not as Bad as They Seem?

   

Pensiones públicas generan tensiones

La Opinion, the nation’s largest Spanish language newspapers, looks at the pension issue, talking with CHCRS member employees. (Article in Spanish).

April 10, 2011
By: Araceli Martínez Ortega

SACRAMENTO.— Después de trabajar durante 20 años para el Sistema de Retiro de los Empleados Públicos de California (Calpers), Darlene Heredia, de 69 años, cobra alrededor de 1,200 dólares al mes por su pensión.

Read more: Pensiones públicas generan tensiones

   

Who’s behind the effort to gut California pensions?

A secret out-of-state donor, according to this report by the investigative journalists at California Watch.

April 7, 2011
By: Chase Davis

An unknown out-of-state foundation has become a substantial backer of an ambitious nonprofit group that is positioning itself at the center of the state's debate over public pensions.

Democratic consultant Marcia Fritz, who runs the nonprofit Californians for Fiscal Responsibility, first mentioned at a San Francisco forum last month that the group had received a substantial contribution from an out-of-state foundation. She said the money will be used to research several competing pension plans that are being proposed this year.

Read more: Who’s behind the effort to gut California pensions?

   

New reports says state workers are not overpaid.

March 31, 2011
Posted in the Sacramento Bee by Jon Ortiz

A new report concludes that public-sector employees' compensation lags that of private-sector workers when education and experience are factored in. The trade-off: Public-sector jobs remain more secure, and health and pension benefits are generally better than in the private sector. Read the full article here.

   

Sacramento Bee: Unions call for protest, urge boycott of Niello dealerships

March 29, 2011
Posted in the Sacramento Bee by Jon Ortiz

Angered by former Assemblyman Roger Niello's proposed ballot initiative to reduce pension benefits for California state and local civil servants, public employee unions are pushing back. Read the full article here.

   

Orange County Registrar: Police and firefighters are making pension sacrifices

Police and firefighters are making pension sacrifices in Orange County.

March 29, 2011
Posted in the Orange County Registrar by Teri Sforza

Police officers, firefighters and general government employees have given up benefits over the past two years, as efforts to bring runaway pension costs under control intensify, according to a recent survey by the League of California Cities. Read the full article here.

   

Battered Public Pensions Do Better

Even the conservative Wall Street Journal reports that public pension funds are roaring back.

March 7, 2011
By JEANNETTE NEUMANN

A rebounding stock market helped buoy state pension plans' assets in 2010. But the plans still have a long way to go to bridge a funding gap caused in large part by losses suffered during the financial crisis, according to a report expected to be released Monday.

Read more: Battered Public Pensions Do Better

   

An Overblown 'Crisis' For State Pension Funds

Huffington Post
March 7, 2011
By: Zach Carter

WASHINGTON -- In early 2010, Goldman Sachs announced two blockbuster numbers: profits of $13.4 billion for the prior year and compensation of $16.2 billion -- the equivalent of about $500,000 for each employee at the Wall Street titan.

All of this lucre, of course, came courtesy of a massive federal bailout of Wall Street that helped keep Goldman and the nation's other commercial and investment banks afloat in 2008 and 2009, when the worst financial cataclysm since the Great Depression began to ravage the economy. Taxpayers were footing the bonus bill.

Read more: An Overblown 'Crisis' For State Pension Funds

   

Most retirees live modestly

In the Central Valley, the Bakersfield Californian had an extensive series on pensions. Its conclusion: Most retirees live modestly.

March 29, 2011
By James Burger

The stories come out of every corner of California, sparking outrage: public employees retiring at age 50 or 60 with a larger annual paycheck in retirement than when they worked.

News of six-figure retirements for mid-management firefighters, sheriff's deputies and top county leaders has added to the fire. Read the full article here.

   

Why employee pensions aren't bankrupting states

Investigative reporters at McClatchy Newspapers, one of the nation’s largest newspaper chains and parent company of the Sacramento, Modesto, and Fresno Bee newspapers, examined public employee pensions across the U.S.  Their conclusion: “There's simply no evidence that state pensions are the current burden to public finances that their critics claim.”

March 6, 2011
By Kevin G. Hall | McClatchy Newspapers

WASHINGTON — From state legislatures to Congress to tea party rallies, a vocal backlash is rising against what are perceived as too-generous retirement benefits for state and local government workers. However, that widespread perception doesn't match reality.

Read more: Why employee pensions aren't bankrupting states

   

Who funds the pension Chicken Littles?

This blog post on Calitics.com goes down the list of who’s behind the attacks on public pensions. They include a lobbyist, political operative, and taxpayer groups. Read the full article here.

   

Public employees and retirees protest dealership

When former Assemblyman Roger Niello introduced a ballot measure to gut public employee mentions, CHCRS fought back, urging a boycott of his dealership. Watch the video of CHCRS members here.

   

The Shameful Attack on Public Employees

Wednesday, January 5, 2011
By: Robert Reich

In 1968, 1,300 sanitation workers in Memphis went on strike. The Rev. Martin Luther King, Jr. came to support them. That was where he lost his life. Eventually Memphis heard the grievances of its sanitation workers. And in subsequent years millions of public employees across the nation have benefited from the job protections they’ve earned.

But now the right is going after public employees.

Read more: The Shameful Attack on Public Employees