The CA legislature votes to approve the Governor's pension reform bill, Friday 8/31/12.
The deal, estimated to save between $40 billion and $60 billion over 30 years, is considered the key to the success of Brown's November tax-hike initiative because the governor and Democratic leaders need to prove to suspicious voters that they are serious about controlling spending. A single bill that contains all of the reform package, AB340, easily passed a conference committee Tuesday night and will be voted on by the Democratic-controlled Legislature on Friday.
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| Pension reform is happening |
For the formula to take effect at the local level, it would have to go through the collective-bargaining process. But local governments could impose 50-50 shared costs by 2018 if negotiations reach an impasse. The reform also bans employees from enhancing pension payouts by artificially inflating their final salaries -- a practice known as "spiking." Silicon Valley Mercury News/Steven Harmon, 8/28/12. "Governor Brown unveils pension compromise that caps benefits." Read Article.
.... "... pension reform advocates said the Democratic proposal fails to address the long-term costs of the state's pension liabilities, largely by leaving benefits for the state's more than 200,000 employees unchanged without contract changes negotiated with unions.
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| Defusing the taxpayer pension/benefits bomb |
The
reform deal does not include putting new government workers in a hybrid
system that includes a 401(k)-style plan, greater independence for the
board that oversees the state's main pension fund, or a reduction in
retiree health care costs, which are skyrocketing.
.... Still,
Brown hailed the deal as a landmark achievement and said it will make
pension benefits for public employees lower than they were during his
first term in office, in 1975. A legislative committee passed the bill
on a 4-2 party-line vote late Tuesday, setting up a full vote by
lawmakers Friday. CBS News/Politics, 8/29/12. "Compromise pension reform deal reached in California." Read Article.
Related - Time Magazine/Politics/Fareed Zakaria, 6/25/12 "Why we need Pension reform." Picture from the Time article.
Posted by Kathy Meeh
28 comments:
Jerry knows this doesn't go anywhere near far enough to save us. The problem is current employees not future ones who won't retire for 30 years. Need to raise retirement age to 65 NOW, cap all pensions at SSI levels, and eliminate free health insurance.
It would mean big changes but it hasn't passed the legislature vote, yet.
It is the baby boomers that have enslaved our children to pay for their fat pensions and free healthcare.
Vote No on ALL TAX INCREASES UNTIL THIS IS DEALT WITH.
Just say NO to the Blueberry Commission and their 6 Digist Annual Pay and Fat Pensions.
Save our Peace Officers, Fire Fighters, Public Workers, and Teachers. Stop using them as the Sacrificial Lamb.
Peace Officers, Fire Fighters, Public Workers, and Teachers are what's causing cities to go bankrupt with their cushy pensions and benefits.
Lamb? It's pork, baby. It's all pork that's been fattened at the public trough for decades and now the price has to be paid whether the public has the money or not. You ain't seen nothing yet!
Decades ago it was give them the nice pensions and benefits because their salaries aren't much. Then it was improve the salaries because, you know, they're not much and these jobs are vital to society. Now, after the mother of all wake up calls, it's these bumbs are overpaid and anybody can do their job. Ah, human nature.
yeah, it's those Teachers that are causing cities to go bankrupt with their cushy pensions and benefits.
don't let facts get in the way of your stupid ideas
Teachers, as warm and fuzzy as they may be, get great pensions.
They do? Tell us how much they get.
Here's some very recent info about teachers' pensions from Intercepts, "a listening post monitoring public education and teachers' unions". The same numbers are available from a wide range of sources. My personal experience with friends and family who are educators also confirms this.
CA educators who teach 30 years can collect about 2/3rds of their final salary at age 60. Most other
30 year CA gov't workers, local and state, get from 75% to 160% of their highest salary as their total retirement monthly payout and they can start drawing as early as age 50. The method of calculation varies from union to union.
Retired CA teachers earn more than
working teachers in 28 states!
As generous as CA educators' pensions are they are much less than the pensions of other CA local and state employees. There are some other important differences. Teachers pay 8% into CalSTRS and there is also an employer contribution of about the same. However, most other public employees have part or all of their contribution paid by their employer. And, unknown to many of us, it is standard practice for those employer contributions to be counted later as salary. Of course, that raises the basis for pension calculation. There are lots of other little tricks to raise that pension, too.
CalSTRS is the second largest pension system in the country. And, in terms of unfunded pension liability it is also second at $65Billion. Yep, CalPERS is first. You remember them, don't you?
So, teachers aren't doing as well as other state and local public employees but they are definitely doing ok. Very ok.
And compared with the rest of us regular working stiffs they are all doing a lot better.
Booo Hooo city workers make more then me waaaa, county workers make more then me waaaa, state workers make more then me waaaaa, federal workers make more then me waaaaaa.
Get off your lazy azz's and go maker your own fortune. No one is going to hand it to you.
Sit and whine and cry cause city workers make over 100k waaaaa
sad pathetic souls
I have no problem with a teacher's pension of 2/3rds of final salary. My problem is with the funding mechanism of all gov't employee pensions, teachers included. These pensions should be self-funded. Cut the employer contribution way down. And, enact legislation to prevent the accumulation of an unfunded liability. The public should never be stuck with an unfunded liability for a public employee pension plan. If current contributions fall below the pay outs being made to retirees then pay outs are reduced and contributions increased until the balance is restored. Self-funding would also create renewed and greater pressure to eliminate corruption in the system like larding, spiking, double dipping, etc. Radical change to the public employee pension system is critical to the economic health and security of this country.
BooBoo I don't expect anybody to hand me anything, I'm just tired of having to hand it to public employees and their unions and let us not forget our very well compensated, benefited and pensioned, elected officials, and, very likely, you.
I don't mind teachers getting a nice fat pension, just don't me (the taxpayer) pay for it.
Time for the Teachers to fund their own pension and healthcare benefits. I'm broke.
Anonymous said...
"Booo Hooo city workers make more then me "
You forget who pays your salary. And how paying these unsustainable compensations is sucking money from services for the poor, seniors, children. Right here in Pacifica.
So go ahead and keep you pension, but don't expect us to pay for it.
We in the real world only get $2200 a month on Social Security. If we want more money it's up to us to put it aside. We've seen our pay, health insurance and 401K's drastically eroded.
But sure, you want us to subsidize you? No problem.
boohoo you should have planned for your future when you were younger. Booo Hooo you blew your money, didn't save, didn't think about retirement.
You probably refinanced 12 times and pulled money out of your house.
waaa
^ Compassionate government worker ^
^ well with appreciative sympathetic comments like that Anon 8:30 it's no wonder we taxpayers are clamoring to give our money to the big fat public unions.
It's an outmoded, unsustainable public employee pension system set up decades ago under very different economic conditions. Short of a revolution, there is no quick way to dismantle it. We are going to have to deal with slow and painful changes made through the political process. That's the same political process used to create the problem. And, in California, in Jerry Brown, we have one of the primary builders of the CA public pension system in the 70's now trying his best to get the juggernaut under control. Do you think he feels the awful weight of that burden?
Public employees who have to deal with a whiny, self-entitled public every day deserve every penny they get. While private sector workers occasionally get to enjoy fat profit sharing, fat bonuses, fat paychecks, and fat perks (cars, dinners, expense accounts, jets, first class/business class travel) -- public employees get a decent paycheck and fat pension by comparison to most of our 401ks.
Sorry that we private sector workers are now (temporarily) toward the bottom of the wage-and-benefit totem pole, bt it'll turn around and we can all go back to patting our cops, firemen, and teachers on the head and saying, "Good little public servant" as we enjoy fat paychecks, profit sharing, and corporate bonuses.
At least I don't have to negotiate my pay, I can make as much as I can earn and not have any whiny gadflys poking around my salad numbers.
Uh huh Anon 9:10 Poor bureaucrats pushing paper dealing with the annoying public. I know, you really have it rough. It's really hard telling dumb people they need to follow your procedures. That's why you deserve such outrageous compensation.
We haven't had a war on our soil in almost 150 years. We are overdue for a little venting between the classes.
This is too bad. Now in the next few years their will be an even greater decline on getting college graduates and the brightest working for the State. We have lost our final draw for these individuals. The pay is already below those with similar jobs in the private sector. The last encouraging reason to work for the state were at least the benefits as employees were not getting raises to keep up with the cost of living. Also their furloughs left some of them losing homes and also impacting the economy. Wow it's sad how middle class America attacks the working man. We will regret this in years to come.
I'm not going to regret putting the brakes on out of control public employee salaries and the mother of all pension bombs. All kinds of people lost their homes, jobs, financial security, rosy futures and comfortable retirements. It is right that public employees should share significantly in the losses just like the rest of the country's workforce. Suggesting we protect them as some kind of standard bearer for the threatened middle-class is bogus. Until they really share the economic pain the rest of the workforce is still going through, we have nothing in common.
No, it's not too bad. It's long overdue. Time for us to adjust public employee salaries and those bloated pensions to fit our new economy. Bureaucracy has never attracted the best and brightest, but it has given birth to powerful public employee unions. Careers in private industry are always an option for those who feel undervalued and are willing to leave the safe haven.
It's too bad some misguided people characterize paper-pushers making 100k+ as the "working man".
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