Pension reform rolls at polls: 401(k) test looms

Modesto voters gave advisory-only approval Tuesday to moving city employees from pensions to a 401(k)-style investment plan, a preface to a for-real vote in San Diego next June.

Despite a strong opposition campaign from unions, Modesto voters approved three non-binding advisory measures calling for a switch to a 401(k) plan, extending retirement ages and curbing “spiking” or the improper boosting of pensions.

The Modesto vote echoes support for switching new public employees to a 401(k)-style plan in a Public Policy Institute of California poll issued in March, 71 percent in favor.

A pension reform group led by Dan Pellissier filed two statewide initiatives last week — one switching new public employees to a 401(k)-style plan and the other giving new hires a “hybrid” combining a lower pension and a 401(k)-style plan.

The group plans to pick one initiative by early January and begin gathering signatures to place the measure on the November ballot. But Pellissier said the group is still looking for money to fund the signature drive, an estimated $3 million.

A statewide Field Poll issued in March showed support for a hybrid plan, 58 percent. The Field and PPIC polls both found a reversal in recent years in voter attitude toward public pensions, now regarded by many as “too generous” and a “big problem.”

The vote Tuesday also was a reversal in San Francisco, which rejected a pension reform measure last November as voters in six other cities and one county approved a wide range of pension reforms.

This time San Franciscans approved a measure backed by labor and business groups, Measure C, that increases employee pension contributions and gives new hires a lower pension.

Labor groups negotiated the measure as an alternative to Measure D, a stiffer initiative rejected by voters Tuesday that was sponsored by Jeff Adachi, the San Francisco public defender. He also sponsored the initiative rejected last year.

Adachi was one of 15 candidates in a scramble for mayor. The apparent winner, interim Mayor Ed Lee, cited his success in getting broad support for Measure C after his appointment in January to replace Gavin Newsom, who was elected lieutenant governor.

Measure C has an innovative provision aimed at avoiding a legal challenge. Although some disagree, many believe that a series of court rulings mean that pensions promised current workers cannot be cut without providing a benefit of equal value.

The increase in employee pension contributions imposed by Measure C is regarded as a cut in promised pension benefits. The offsetting benefit in Measure C lowers employee contributions in good economic times.

Some backers hope the agreement on Measure C is a small but significant first step toward solving a huge San Francisco pension and retiree health care problem. Costs have soared to $400 million a year and could double in four years.

Public pension systems often expect to get about two-thirds of their revenue from investment earnings. When those earnings fall short, the burden of covering the shortfall falls on the government employer not the employee.

To avoid this risk, the retirement plan offered by most private-sector employers is not a lifetime guarantee of a monthly pension but a 401(k) individual investment plan. The employer makes an annual contribution and has no long-term debt.

The state of California, on the other hand, has a long-term debt or “unfunded liability” for its three pension systems of roughly $100 billion to $500 billion, depending on whether investments earn 7.75 percent in the decades ahead or only 4 percent.

In San Diego Tuesday, officials announced that an initiative qualified for the June ballot that would switch all new hires except police to a 401(k)-style plan. It’s backed by Mayor Jerry Sanders and Councilmen Carl DeMaio and Kevin Faulconer.

The city has a $2 billion long-term pension debt. Two disastrous deals in 1996 and 2002 raised pensions and lowered city payments into the pension fund, resulting in lawsuits, a moratorium on city bond sales and painful budget cuts.

Switching new hires to a 401(k)-style plan could take decades to cut costs. Savings would come sooner from the initiative’s five-year freeze on pay used to calculate pensions, which likely would be challenged in court.

San Jose Mayor Chuck Reed proposed declaring a fiscal emergency and capping city pension contributions at 9 percent of pay. A ballot measure once planned for this month was delayed for talks on a union counterproposal, which failed last month.

Now the San Jose city council is expected to make a decision early next month about placing a pension reform measure on the March ballot. City retirement costs, $245 million this year, are expected to reach $430 million in four years.

The Modesto measures were written by Councilman Brad Hawn, a mayoral candidate who finished second Tuesday and will be in a runoff. Opponents said the measures were placed on the council agenda at the last minute to make the Nov. 8 ballot, avoiding proper review.

“The unions argue, with some justification, that this was a campaign strategy more than a serious reform effort,” said a Modesto Bee editorial. The newspaper opposed the 401(k) and extended retirement measures, but supported the anti-spiking measure.

A union campaign against the measures included an emotional mailer from the family of a police officer, injured in a vehicle pursuit and left in a coma for several years before dying, that suggested a 401(k)-style plan would have given the family no support.

A union cable television ad showed an elderly man putting on SWAT team gear and saying in a quavering voice, “I’m on my way to help,” as he hobbled forth with the aid of a cane.

Another union video showed Hawn saying a switch to a 401(k)-style plan could cost $106 million plus adding Social Security coverage. But the video said the increased cost was not mentioned in the ballot pamphlet.

Some of the costs of switching to a 401(k)-style plan were mentioned by Alan Milligan, the California Public Employees Retirement System chief actuary, in a Capitol Weekly article last May.

A closed pension plan has to be managed for the lifetime of the members, some in their 20s, which could be 60 years. During this period the employer would be paying the cost of two retirement plans, the pension and the 401(k).

As a frozen pension plan ages, less risky investments to maintain liquidity are likely to result in lower earnings and higher employer contributions. Studies show pensions are cheaper to administer than 401(k) plans. And adding Social Security costs the employer 6.2 percent of pay.

“This means taxpayers may end up paying more for less – higher costs for lower worker benefits,” Milligan wrote.

In Palo Alto Tuesday, voters repealed binding arbitration for police and firefighter contract negotiations. Opponents contend that arbitrators, who must pick either the labor or management offer without modification, usually pick the labor proposal.

The Palo Alto vote continues a string of votes to repeal or limit binding arbitration, some paired with pension measures, that includes Vallejo in June last year, San Jose last November and this year San Luis Obispo in August.

Reporter Ed Mendel covered the Capitol in Sacramento for nearly three decades, most recently for the San Diego Union-Tribune. More stories are at http://calpensions.com/ Posted 10 Nov 11

84 Responses to “Pension reform rolls at polls: 401(k) test looms”

  1. Rex The Wonder Dog! Says:

    Can anyone say Jefferson County, Alabama!!!!

    Largest muni BK in US history!!!!!!

    Coming soon to a CA muni near you!

    Can you say PENSION HAIRCUTS for CURRENT retirees????

  2. Rex The Wonder Dog! Says:

    The Modesto vote echoes support for switching new public employees to a 401(k)-style plan in a Public Policy Institute of California poll issued in March, 71 percent in favor.

    I was right, 71% of Californians want major pension reform of the public sector, if you take out the 15% of the public employees who want to keep it that 71% goes up to 86%.

    Seesaw, Teddy Steals, the writing is on the wall kids. Read it and weep :)
    ;)
    :P

  3. Rex The Wonder Dog! Says:

    A union cable television ad showed an elderly man putting on SWAT team gear and saying in a quavering voice, “I’m on my way to help,” as he hobbled forth with the aid of a cane.

    Oppppssssss….that public union talking poijt back fired BIG TIME!

    Teddy Steals, they need you up in Stockton to run fix the mess they made :P

  4. Ted Steele, Janitor Says:

    zzzzzzzzzzzzzzzz poodle give it a rest— the same old dull normal chant from you….it’s old little buddy. You can do better, can’t you? The only new and cogent thing in the whole article is the point that switching to a 401k ttype plan will end up costing more in the long run….and…… Poodle— I am, still waiting for you to cite that case that abrogates the US Constituitions’ Contracts Clause…..and waiting……and waiting….and waiting….. LOL

  5. Ted Steele, Janitor Says:

    Oh…and thanks for letting me live in your head little buddy….there’s alot of empty space up here…lol….oh my this is easy !

  6. SeeSaw Says:

    I take more encouragement from the vote, in Ohio, last Tuesday. Many voters in Modesto, were most likely coming from the respective,personal standpoint, of unemployment–misery loves company. It doesn’t matter what advisory measures they vote in, or not. The only thing that matters, is in the contract clauses, of the State and Federal Constitions. Whatever is done in the future, will be done legally, and affirmed by the courts. I cannot change, whatever will happen, in that aspect, and I choose to go on, with my daily life. As far as Alabama goes, they have my sympathy. The fact that such a thing causes such glee within, you, Rex, points up to a pretty sad situation for you. Your attitude, on these formums, seems to be regressing, pointing to desparation, on your part. I feel sad for you. (I saw a new Wall Street movie yesterday, I would recommend–“Margin Call”.)

  7. SeeSaw Says:

    I see I have quite a few spelling errors, which I cannot correct. That is why Disqus is such a good servicer, in the regard, of comment forums. When, you see your errors, you can edit.

  8. Reilleyfam Says:

    A closed pension plan has to be managed for the lifetime of the members, some in their 20s, which could be 60 years. During this period the employer would be paying the cost of two retirement plans, the pension and the 401(k).

    As a frozen pension plan ages, less risky investments to maintain liquidity are likely to result in lower earnings and higher employer contributions. Studies show pensions are cheaper to administer than 401(k) plans. And adding Social Security costs the employer 6.2 percent of pay.

    “This means taxpayers may end up paying more for less – higher costs for lower worker benefits,” Milligan wrote.

  9. Reilleyfam Says:

    The hate on this page is truly sickening. You will all burn in hell.

  10. Ted Steele, Janitor Says:

    ouch— I don’t have hate for anyone out here at all…. I hope no one reads that I do !

  11. Rex The Wonder Dog! Says:

    I take more encouragement from the vote, in Ohio, last Tuesday.

    I must say, I was sort of surprised by the Ohio vote-even though it had been shown by polls to be losing. Especially since it is a mid west, more conservative state.

    Oh well. Have to wait and see how Ohio does, hopefully better than Jefferson County, Alabama, but if they wind up like Jefferson it is a moot point on the Tuesdays vote.

  12. Rex The Wonder Dog! Says:

    Poodle— I am, still waiting for you to cite that case that abrogates the US Constituitions’ Contracts Clause…..and waiting……and waiting….and waiting….. LOL

    OK Teddy Steals, here we go, for the 1,000,000,000,000,000,000,000,000th time, there is NO contract that starts the day the public employee is hired and lasts until they reitree.

    No such thing as a 30-40 year contract.

    There is ONLY the contract they are hired under, usually 1-3 years in duration, and after that everything is fair game, including pensions.

    I cannot make that any more clear Teddy, please put that pea sized brain of yours to work, as hard as that may be.

    PS, where do you want my rent check, for camping out inside your head :)
    ;)
    :P

  13. Rex The Wonder Dog! Says:

    SeeSaw Says:

    The only thing that matters, is in the contract clauses, of the State and Federal Constitions.

    Seesaw, read my post ^^^^^^

    There is NO 30-40 year pension contract for public employees, you do NOT have a contract for pensions starting the day you are hired that lasts 40 years.

    Pensions can be changed with any NEW contract. So yes, you are entitled to legal protections for contracts-I AGREE-SURPRISE!!!! But you do NOT have a 40 year pension contract.

    Can you please show me your 40 year signed contract that guarantees you a pension formula that lasts for 40 years??? No, you cannot. You don’t have one.

    Teddy Steals, how about you, can you provide a copy of your 40 year pension contract???

  14. SeeSaw Says:

    You were interpreting the polls wrong, Rex. A, “No” vote was in favor, of overturning, the recently enacting anti-labor law in Ohio. The “No’s”, were ahead in the polls all week, prior to election day. The vote in Ohio, has nothing to do with what is happening in Alabama.

  15. SeeSaw Says:

    Rex will not decide–the Courts will decide. End of discussion.

  16. SeeSaw Says:

    Reilleyfam, you must be having a post-reaction to some, of the other threads you have been reading. There truly is a lot of hate, on various forums, on the part of public sector detractors. How you can perceive here, that I am spewing hate, is beyond me. I would certainly not voice a wish for anyone, to burn in hell.

  17. Rex The Wonder Dog! Says:

    SeeSaw at 11:40 PM November 9, 2011
    You may have your opinions but not your own facts. My opinion is that Jerry Brown is the most honest, ethical, and pragmatic politician, in CA, today

    Seesaw, is there ANY website you do NOT leave comments on??????????

    And do you tell everyone who disagrees with you they have their “facts” wrong, I thought it was just ME :P

    http://discussions.latimes.com/20/lanews/la-me-cap-brown-20111110/10

  18. SeeSaw Says:

    I leave them wherever I can, Rex. I am driven.

  19. SeeSaw Says:

    I have no concern about my own pension contract, Rex. I am retired for four years–save your threats. I will continue to support, the active and future public sector workers. I would like to see more retirees come out, and lend their support too. I trhink it is happening, with the CalPERS Ambassador program, and the union-organized, Truth Squads.

  20. Ted Steele, Janitor Says:

    I agree seesaw and I hope the Poodle in time understands that reform is coming and that in fact it will help fine tune these important financial programs so they can continue for another 100 years. Our nation and economy are far better off with more workers being taken care of than less and these pensions, while certainly always in need of adjustment, have served people and society well.

  21. Rex The Wonder Dog! Says:

    I would like to see more retirees come out, and lend their support too. I trhink it is happening, with the … Truth Squads.

    TRUTH SQUADS!!!!!! My gawd that is funny!!!

    Ted Steele, Janitor Says:

    ……and economy are far better off with more workers being taken care of than less and these pensions,

    Teddy, I am going to post something for you to read, it goes something like this, if EVERY person retired with a PUBLIC UNION pension inCA it would cost 40% of this states GDP, that is not possible you foolish GED educated nurse;

    If every American over the age of 55 received a pension of $55,000 per year, it would cost current workers $4.45 trillion per year, an amount equivalent to nearly one-third of America’s annual GDP.

    http://www.city-journal.org/2011/cjc0505er.html

    Teddy can you say “unsustainable”?

    BAM!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

  22. Ted Steele, American Says:

    Poodle— Man I live in your head….. yikes– spooky——-

    Notwithstanding your argumentative and strange stats, Of course those are not average worker pension numbers, new tiers will be added, new contribution rates are coming, reform is coming, etc etc etc—- you seem to take delight in a scene of American destruction…..It won’t happen the way you dream it will little buddy ! God Bless ya !!!

    Hey, seriously man, where is that citation to the case that asserts that the contracts clause is in applicable here? Hmmmmmmmm….waiting…..

  23. Rex The Wonder Dog! Says:

    Notwithstanding your argumentative and strange stats, Of course those are not average worker pension numbers,

    Teddy Steals, WHAT ON EARTH ARE YOU SMOKING??? The certainlly are AVERAGES.

    Open up your 9th grade educated GED level brain and READ. read young man, READ!~~~~~~~~~~~~~~~~~~~

    In less than five years California will have over 10 million residents who are over the age of 55 (ref. U.S. Census, California Demographics). If every one of these people were to receive a pension equivalent to what the average public employee in California can now expect after working full-time for no more than 30 years, it would cost taxpayers nearly $700 billion per year. To put this in perspective, $700 billion is 40% of California’s entire gross domestic product.

    http://civfi.com/2011/11/01/government-pensions-increasing-hedge-fund-investing/

    DOUBLE BAM!!! BAM!!!!!

  24. SkippingDog Says:

    Too bad, Rex. Jefferson County contracts for its retirement system obligations through the Alabama Retirement System, so all of the retirees there will continue to get their pensions as promised.

    Depending upon how the bankruptcy petition was written, the ARS could well be one of the creditors, but it will get the money owed to it by the county, even if it takes a little longer than originally planned.

    I think it’s most enlightening to see that the places actually filing for bankruptcy now are in the Red-Red state of Alabama, a place notable for its conservative and corrupt politics.

  25. SeeSaw Says:

    Well, Rex, if every resident of CA, were receiving the same pension, at the age of 55, there would have been payments made, into the plan, during their respective working tenures, and they would all able to live off the fruits, of the earnings, that the Plan would make for them, from their payments.

  26. President Theodore Steele Says:

    Poodle— I can’t help ya little buddy! If you’re going to cut n paste from other places we all see you hang out…..please do yourself a favor and fact check em ! LOL ——- oh——-ah——- can I expect that case cite on the contracts clause??? hmmm

  27. Rex The Wonder Dog! Says:

    Too bad, Rex. Jefferson County contracts for its retirement system obligations through the Alabama Retirement System, so all of the retirees there will continue to get their pensions as promised.

    SKippy, go tell that to the cops and ff’s in Central Falls RI, they said the EXACT SAME THING!!!!.

    BTW- How did that work out for them in Central Falls RI, Skippy????…..Opppsss…….I forgot, they took 55% pension cuts. :)
    ;)
    :P

  28. Rex The Wonder Dog! Says:

    I think it’s most enlightening to see that the places actually filing for bankruptcy now are in the Red-Red state of Alabama, a place notable for its conservative and corrupt politics.

    Vallejo is liberal, it is the Bay Area. That leaves RI, AL and OH. Rhode Island was won by Obama with a 27.8% margin of victory in 08. RI is considered a blue state. OH voted for Obama in 2008, so I would not call OH a “red” state either. I don’t know how AL voted, probably red there…….so out of the four muni BK’s three-3- are blue.

    You’re analysis of the red/bue muni bk comparison was off. As usual.

  29. SkippingDog Says:

    You’re wrong again, Rex. Central Falls had a self-funded city pension system, as did Prichard. Jefferson County uses the state system, just as Vallejo does here in California.

    If you’re going to spew this stuff, at least try to keep up with the facts of each case. It will make you seem slightly less ridiculous.

  30. President Theodore Steele Says:

    Skipper— I think the poodle needs a healthy dose of ignore—he makes up or misunderstands or spins about 75% of the dull-normal rhetorical talking points he cutnpastes out here……yaaaaaawn. These tiny cash negative closed pensions systems are apples and oranges as you know——

  31. SkippingDog Says:

    BTW, Rex, Alabama is a “bluer” state than even Texas, taking into account the past two decades of presidential elections, and its state legislature is hard corps Republican.

    Rhode Island is as Red as Alabama is Blue, but it’s much smaller overall, as you well know.

    Ohio is a neither Red nor Blue swing state, since it has remained so for the last several national elections, but recently elected a Republican governor.

    Out of all these, it’s interesting that the greatest problems are emerging in Alabama. That state can now add the largest Chapter 9 bankruptcy to its resume, in addition to having George Wallace as a former governor and those idiots Sessions and Shelby in the Senate.

    With just a little bit of effort, you can easily find out that the reason Jefferson County is now in Chapter 9 is because of a large sewer project that was rife with old fashioned, money grubbing corruption. The County Commissioners responsible – Republicans by the way – are now in prison, but the financial damage is done.

  32. SkippingDog Says:

    Good point and roger that, President Steele. He seems to be getting more pathetic as time goes on. SeeSaw is correct on that count.

  33. SeeSaw Says:

    Orange County might be from a blue state, Rex, but it is, surely, Red. I would guess that two out of the three municipal bankruptcies, to take place in the CA, in the last 60 years, are Red. I’m not really sure, about Desert Hot Springs–I would guess Red.

    You need to stop getting so excited about bankruptcies–it is not nice to gloat, over the hardships of others. Vallejo, spent 12 million dollars, for legal fees, in their bankruptcy–I took that figure directly from the Vallejo Times Herald.

  34. SeeSaw Says:

    Skipper, I think you transposed a couple colors on your post. RI is Blue, and Ala, is Red.

  35. SkippingDog Says:

    Good catch, SeeSaw. Thanks for the correction.

  36. Rex The Wonder Dog! Says:

    With just a little bit of effort, you can easily find out that the reason Jefferson County is now in Chapter 9 is because of a large sewer project that was rife with old fashioned, money grubbing corruption.

    With just a bit of effort you can easily find out that the real reason CalTURDS is only 48% fudned is because of a large fraud known as SB400 that was rife with old fashioned, money grubbing corruption from public unions :)

  37. Rex The Wonder Dog! Says:

    Skipper, I think you transposed a couple colors on your post. RI is Blue, and Ala, is Red.

    Don’t bother SKippy (or nurse Teddy Steals) with facts, they live in their own fantasy world….oh wait- you do too seesaw!

    I need OCO and Donk here to help with this smackdown, it is too easy for just one dog :P

  38. Rex The Wonder Dog! Says:

    How much did those cops and ff’s take in pension cuts in Central Falls RI?? Anyone know???

    55%

    I think they said the “contracts clause” would not allow forced pension cuts :)

    Teddy, they need you up there in RI to expalin the “contracts clause” to the federal judges!

    BOOM!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

  39. SeeSaw Says:

    These forums are for civil discourse, Rex. Refusing to refer to CalPERS, by its proper name, is childish. We want adult discussions. These issues are very important, to a lot of people–not about verbal, “smackdowns”.

  40. President Theodore Steele Says:

    Wow—- seriously poodle—— childlike observations don’t draw people into your positions. And I wonder if you know of any published case anywhere in any jurisdiction that abrogates the contracts clause? As I am sure you know a bk case isn’t a “law”congress passes that interferes with private contract rights, you know, a case that allows for relief from that proscription? Anywhere, ever, any jurisdiction? Hmmmmmmmmmm

  41. spension Says:

    Per dollar contributed, DB plans are more economical than 401(k) plans. Risk is not a conserved quantity, and DB plans simply reduce risk and thereby require fewer dollars for equivalent benefits. Also, 401(k)s are a bonanza in fees for investment bankers. Unless Vanguard is used. Bogle is a genius… I’d just turn over all state 401(k)s to Vanguard.

    California’s historical problem is not the use of DB instead of 401(k), it is a terrible ignorance in managing the DB plans… California promised far higher benefits than contributions justified. The calculations of the normal cost have in no way taken into account the ups and downs of the markets… a constant steady value of return is assumed, and now the down market is revealing the innumeracy of California’s pension managers.

    Sovereign default is the way out… US states are sovereign and simply defaulted in the 1800’s. Evades the contract clause. Default is correct because our state governments have greatly overindulged in debt that can never be covered… including pension debt, bond debt, etc.

    Greek bond holders are only getting 50 cents on the dollar. Argentina, Thailand, etc have had sovereign defaults in their histories. There is a whole book `This Time is Different’ about sovereign defaults throughout history. They’ve happened hundreds of times. Germany, France, even England long, long ago. The one exception for 230 years or so was the US, simply because when our States defaulted, the authors didn’t count that as a US default.

    The sovereign State economies will be seriously messed up for 10 years or so. Oh well, our just desserts for running the California government spending like a banana republic for 50 years. Pain now for benefit later; our grandchildren will thank us for a sovereign default.

  42. President Theodore Steele Says:

    Spension— Well…………not exactly.

    Yes– a few states in the 1800’s did default through a version of SI. But–First you need to look at pre and post Northwest Ord. states. They are different. 13 colonies v. the rest on the issue of SI. And……of course the structural debt problems will remain as they did for those states who suffered financial ruin re credit for in a few cases 40 years! (and a hundred other legal issues…)

    As you know bk is not available to the states because of Chapter 9, but is a state sovereign for these purposes? Maybe, but it is wildly unclear. Would that create a federal receivership? Some say yes others no. Clearly bk or SI won’t get states out of 14th A. property claims– see Art 1 Sec 10 and the seminal case— US Trust v. New Jersey, 431 US 1 (1977). Maybe congress could vote to repeal USC 1983 which gives citizens the right to sue and recover 14th A. property rights but could you imagine the 51 vote majority required in the house and the 60 in the senate and even then surviving the veto ! LOLOLOL— oh my ! Doubt it…

    While there may be the odd muni bk or default here and there.The answer in ALL of this will end up being fed budget cutting and of course the drama and long road on that, similar cutting at the state level, trims to gov size a bit and etc. On the pension front– reform like Brown’s etc etc etc——- the rabbit will pass thru the snake and life will go on. Catastrophic doomsday anti symphonic con law predictions and nutty melodrama on the whole won’t occur because it has been shown not to work and the structural issues will still remain…….All of this will come to pass in the context that the awakening zeitgeist of the 99% of VOTERS are also the 99% of Americans who now understand that wall street, and the corp power brokers want them to hold the bag while they stuff it with our futures and take their capitalism off shore where they can make even more money and leave all of us even more barren. Won’t happen– not even close.

    Now — I can hear the band playing Hail to The Chief– I gotta go!

  43. Rex The Wonder Dog! Says:

    As you know bk is not available to the states because of Chapter 9, but is a state sovereign for these purposes? Maybe, but it is wildly unclear.

    Actually you fool it is clear, and has been crystal clear for over 200 years. States are soverign and cannot be sued.

    Teddy, once again your GED brain is analyzing law that requires a law degree to understand.

    States are IMMUNE from lawsuit, from you, from pensioners, from EVERYONE, under the 11th Amendment, YOU CANNOT SUE THEM FOR BREACH OF ANYTHING! Not ins tate court not in federal court.

    All a state has to do is say-“we’re not paying” and there is NOTHING you or the “contracts clause” can do about it fool.

    Put that in your GED pipe and take a few hits, OK GED WOnder

  44. Rex The Wonder Dog! Says:

    These forums are for civil discourse, Rex. Refusing to refer to CalPERS, by its proper name, is childish”
    :)

  45. SeeSaw Says:

    Not only are you childish–you are a S**** A**!

  46. SeeSaw Says:

    The family of Jacycee Dugard sued the State of CA, and the State settled, for 20 million. The Dugard family is now, also, suing the Federal Government.

  47. Rex The Wonder Dog! Says:

    LOL… I know what the “A**” means, but I cannot figure out the first word…… Can I buy a vowel seesaw?

    Stupid?? You would not need the **** for stupid though!

  48. SeeSaw Says:

    Rex, if you have a law degree, please tell us about it. Ted and Skipper, both, would be closer to being holders of law degrees, than you. Don’t you want the truth to be known?

  49. Rex The Wonder Dog! Says:

    The family of Jacycee Dugard sued the State of CA, and the State settled, for 20 million. The Dugard family is now, also, suing the Federal Government.

    And your point is what? The state can ALLOW you to sue them, same with the federal government, but you can ONLY sue IF they ALLOW it, but they do NOT have to all allow you to sue them, it is at their discretion.

    And Dugard was also suing the individual probation officers…….

  50. SeeSaw Says:

    In your dreams, Spension. I don’t have time to witness and recover, from what you would prefer to see. You blame CA for the way it has run its Government. How about blaming the people who caused all of this. (See, “Margin Call”, just out–fictional account of a big Wall Street conglomerate’s final 24 hours, before the big collapse.)

  51. Rex The Wonder Dog! Says:

    SeeSaw Says:

    Ted and Skipper, both, would be closer to being holders of law degrees, than you.

    Seesaw, Teddy never made it out of 10th grade, I think he played Perry Mason in a Jr High play and he is reliving that make believe role.

    I did graduate HS, so am I qualified seesaw????? Teddy can’t say that!
    :)

  52. SeeSaw Says:

    Well, then, a State can be sued–if they allow it. I agree. So, a State can be sued.

  53. Rex The Wonder Dog! Says:

    SeeSaw Says:

    How about blaming the people who caused all of this.

    You mean like CalTURDS and the public employees who make it up, who fraudulently claimed SB400 would not cost a dime, while withholding material information that it would?

  54. Rex The Wonder Dog! Says:

    seesaw, if a state is going to default on their pensions, they are not going to allow you to sue them. Come on, That is not even a remote possibility.

    If they do default it will be just like Central falls, the less the pension the elss thye take, Only the $100K pensions would be widely affected.

  55. SeeSaw Says:

    I know there are other sites, where you can play games, Rex. I am serious. I take seriously, what knowledgable people say. How can anyone take you seriously?

  56. spension Says:

    In about 1841, 10 US States defaulted, and 3 (none among the original 13) repudiated their debts altogether (a 100% haircut). I think those were Florida, Mississippi, and Arkansas. Michigan and Louisiana did large haircuts on bondholders.

    10 states defaulted in 1873-1884. Took until 1919 to settle everything.

    Sure, corruption was rampant on Wall Street, but that money will never be clawed back.

    And the 200-year history of the Stock Market definitely had other events as bad (worse in fact) than the 2008 crash. Not planning for empirically occurring events is innumeracy, and that is what California pension managers did.

  57. SkippingDog Says:

    Rex is correct about the 11th Amendment, in that it may allow a state to avoid a lawsuit over the contracts clause. However, the 11th Amendment doesn’t prevent injunctive relief, which would prevent the contract impairment in the first place.

  58. Theodore Steele IV, Associate Justice Says:

    Wow did the tiny troll poodle ever misread my last post ! Yikes!! He needs to work on his reading comprehension skills……

    …and so my tiny feminine canine 1L friend….I am still waiting for that case citation? Did I hear you stand and shout…”UNPREPARED”? LOL…oh my goodness!

  59. Rex The Wonder Dog! Says:

    SkippingDog Says:

    Rex is correct about the 11th Amendment, in that it may allow a state to avoid a lawsuit over the contracts clause. However, the 11th Amendment doesn’t prevent injunctive relief, which would prevent the contract impairment in the first place.

    Injunctive relief is NOT available to (in federal courts or anywhere else) against the states- so once again you’re wrong, there can be no injunctive relief against a state.

    Injunctive relief in a federal court can only apply to state officials in their official capacity, not the states.

    BAM!!!!!!!!!!!!!!!!

    Man, I HATE being right all the time :)
    ;)
    :P

  60. Rex The Wonder Dog! Says:

    Teddy, I still owe you rent for cmaping out inside your head lil buddy.

    But on the other hand you owe me tuition money for schooling you in the finer points of the contracts clause :)

  61. Ted Steele, The King Res Ipsa Loquitor Says:

    wow— this is classic— the poodle ignorantly misreads my post and ass-umes that my comment inferred that I am positing that there is no such thing as SI—- Of course my comments never said that at all— I was questioning the validity of discharge of debt via SI rather than bk etc…. but the hysterical poodle foams off at the mouth changing the meaning of my post— and 10 posts later we are debating if such a thing as SI even exists! LOL— my god this is a huge waste of space!

    I continually challenge the poodle to cite the case abrogating application of the contracts clause re pension reform and alas— days later—no answer! I even give him huge clues by citing to cases used in the actual district court trial briefs and later cited in the majority and concurring published opinions and……still…..only misdirected name calling…..oh my….seems like poodle may be a small child wildly typo-ing away on his Mom’s computer while she is at the gym! OOOuch

  62. spension Says:

    3 states (Florida, Mississippi, and Arkansas) have once entirely repudiated all their debts. I imagine those cases could be cited as a basis for a current US State repudiating all or part of their pension and other debts.

    Who knows? What are `states’ anyway? Perhaps we’ll see a constitutional crisis akin to that of the Civil War if states again try to repudiate their debts. Or maybe Washington will just go quietly.

    Certainly wouldn’t count on the current Supreme Court to do anything but allow States to wiggle out of their debt.

  63. Rex The Wonder Dog! Says:

    Teddy Steals, How is Harvard Law School ever going to survive with their #1 CONTRACTS professor working as a GED prison guard????

    Bwhahahahahahhahahahaha.

    Bam, Bam, Bam!
    :)
    ;)
    :P

  64. Lord Ted Steele Says:

    Poodle, Well, to answer your question–Harvard will be fine but how are your childish ineffective insults going to help you cite the case of the abrogation of the contracts clause? Hmmm still waiting…..lol

  65. spension Says:

    Lord Steele, the sovereign defaults of Florida, Mississippi, and Arkansas seem to me to show that states can evade their contracts. Full repudiation of indebtedness was undertaken by those states with disregard to their contractual obligations. Partial repudiations have occurred as well, more cases of those.

    Right now Greece bonds are undergoing a 50% repudiation, although it is interesting that the EC is making it `voluntary’ to avoid triggering insurance policies on the bonds.

  66. Lord Ted Steele Says:

    spensions– Remember— the pressure on an economy as the debt to gdp ratio worsens is non linear. There is a vast difference between 70 and 120% !!!! The big modern problem with a sov.default as you suggest won’t come with the default but when we all find out the impact of the trailing derivative loss insurance mess covering the bond losses. That’s private! How much of the cos and cds are insured and how much are naked???? This is why you will never see a repeat of the territorial default of Florida and the few other states who did so in a remarkably different world of 1870. Econ 101 an undergrad course.

    I am Lord Steele Ozymandius, Look upon my works ye mighty and despair!

  67. Lord Ted Steele Says:

    spensions– The reason I punctuate the contracts clause issue is because for a variety of reasons I know you won’t see a US default-at least an intentional one by a premeditated SD.–the real political issue is the K clause because that is where the moving parts of the solution appear to be at this point. Vis- one sees all these goofy pension reform initiatives, midwestern states’ governors issues, congressional efforts etc….ALL of that of course has bumped up against the K clause at one time or another. As I said earlier–the real solution will come with cost cutting budgets, reforming pensions, the tax code, increased gas in the econ tank and jobs— this will level out—- In terms of pensions, at least at California’s level, since their system is so cash positive, just looking at flow out and in, they will have decades to roll on without trouble til we all get out of this period.

    I am Lord Steele.

  68. Rex The Wonder Dog! Says:

    Poodle, Well, to answer your question–Harvard will be fine but how are your childish ineffective insults going to help you cite the case of the abrogation of the contracts clause?

    “..childish ineffective insults..” Teddy ,that was a devestating thing to say about REX TWD, how could you be so cruel :)

    BTW-the “…cite the case of the abrogation of the contracts clause…” is called the 11th Amendement fool ;)

    Please Teddy steals, how many times do I have to tell you this fact? Is 999,999,999 times not enough ??? Or do we need to make it 1 MILLION!

  69. Rex The Wonder Dog! Says:

    Teddy Steals says ” In terms of pensions, at least at California’s level, since their system is so cash positive…”

    CalTurds CASH POSITIVE??????? Dude you’re DELUSIONAL.

    DELUSIONAL!!!!!!!!!!!!!!!!!!!!

    CalTURDS is only 47% funded, any fund under 80% funded is critical, amount under 65% is considerd bankrupt.

    CalTURDS will be 100% broke within 30 years. The $100K club, only 2%, but the take up 10% of CalTURDS expenditures.

    Hey K clause expert, go back to Cantracts I, then Bankruptcy I, and educated yourself ;)

    Teddy, your lies and spin that this is no big deal, that is is a bump in the road, that CalTURDS is coming back, that CalTURDS is properly funded, are as big of a joke as your 100 sock puppet handles.

    Dude, givde it up. You’re not fooloing anyone with your lies :P

  70. Rex The Wonder Dog! Says:

    In California actuarial methods show the Public Employee Retirement Fund (Calpers) at a funding ratio of 87 percent but when private sector market valuation is applied to Calpers, the funding ratio drops to 48 percent, according to the Bigg’s study. Likewise, California teachers’ funding (Calstrs) ratio under current actuarial methods is also 87 percent, as opposed to 46 percent when private sector market valuation is applied. Pension experts say funding levels below 80 percent place the long-term viability of pensions in jeopardy and are nearly impossible to overcome without massive borrowing, painful tax increases, cuts to benefits and increased contributions. Pensions with less than 80 percent of the assets needed to cover present and projected liabilities are considered “endangered,” while those below 65 percent are classified as “critical” under the Pension Protection Act of 2006.

  71. Lord Steele Says:

    1. Well– you finally said it– you think the 11th A. abrogates the contracts clause. Ok—– I can see how you flunked con law.

    2. Since you’ve confused funded level with cash positivity I guess it’s clear you know nothing about pensions either….oh my

    zzzzzzzzzzzzzzzzzzzzz..you’re a funny little troll!

  72. spension Says:

    I can assure you that credit default swaps, dead peasants etc… were never covered in any Econ 101 course.

    Nevertheless it is a fascinating point that insured state bonds have an interest group (insurance companies like AIG…) that will lobby against sovereign default to save their own money.

    Not at all clear that pensions have any such insurance… I don’t think the CalXXXXs are covered by the Pension Benefit Guarantee Corporation.

    Our current US Supreme Court reaches back, way back, for its precedents. Scalia, Thomas, Alito, Roberts are quite likely to let the Florida etc defaults of 1841 guide modern law.

    But in any case, Steele, you wanted examples of the abrogation of the Contract clause. I think the sovereign defaults and total repudiation of debt by 3 US states are your examples.

  73. Lord Steele Says:

    spension—- man you are right about aig et al….. but no— you have not shown abrogation of the c clause with sov default any more than a statutory bk is a violation of the c clause. It is not and neither is Sov default violative of the c clause. They are methods of relief and reorganization. The contracts clause proscribes governments from making laws that abridge contracts. This is the reason the anti pension zealots can’t tea bag their ways into wiping out pension benefits for current workers and current retirees. They are executed contracts.

    Please refer o me as Loerd or Lord Steele.

  74. Lord Steele Says:

    spension—- man you are right about aig et al….. but no— you have not shown abrogation of the c clause with sov default any more than a statutory bk is a violation of the c clause. It is not and neither is Sov default violative of the c clause. They are methods of relief and reorganization. The contracts clause proscribes governments from making laws that abridge contracts. This is the reason the anti pension zealots can’t tea bag their ways into wiping out pension benefits for current workers and current retirees. They are executed contracts.

    Please refer o me as Lord or Lord Steele.

  75. Lord Steele Says:

    Never refer to me as Steele. I am Lord Steele the pension god…king of kings….look upon my works ye mighty and despair….the lone and level sands stretch far and wide….

  76. Lord Steele Says:

    Hey spension—- here’s a funny one—- rex the poodle says he thinks the 11th A. abrogates the contracts clause! LMAO !

    Hey fellas—- a new challenge for ya! Cite me to ANY published or even non published opinion from any jurisdiction anywhere that interprets the 11th A. to abrogate the contracts clause as the poodle troll contends………lol….waiting!

  77. Rex The Wonder Dog! Says:

    “spension—- man you are right about aig et al….. but no— you have not shown abrogation of the c clause with sov default any more than a statutory bk is a violation of the c clause.”

    Teddy Steals, you are dumber than a bag of rocks- you GED Wonder……. The contracts clause does NOT trump the states sovereign immunity you GED fool.

    Go back to grade school, finish 5th grade, then come back and we’ll talk.

  78. Rex The Wonder Dog! Says:

    ” I don’t think the CalXXXXs are covered by the Pension Benefit Guarantee Corporation”

    PBGC only covers the private sector. And when they take over ALL the 6 figure pensions are wiped put-max pension at the PBGC is $54K at age 60, if they are below age 60 that $54K goes down much further………

  79. Rex The Wonder Dog! Says:

    But in any case, Steele, you wanted examples of the abrogation of the Contract clause. I think the sovereign defaults and total repudiation of debt by 3 US states are your examples.

    You’re arguing with a GED educated crossing guard, Teddy Steals would not know the difference between the 1st Amendment and a local ordinance.

  80. Rex The Wonder Dog! Says:

    Teedy Steals would still be claiming the K clause prevents BK courts from cutting pensions in BK court- like he did for years- if not for Central Falls RI already doing just that.

  81. ted Steele, The King Res Ipsa Loquitor Says:

    lol poodle—– zzzzzzzzzzzzzzzz oh my– childlike insults seems to be all you’ve got!

  82. ted Steele, The King Res Ipsa Loquitor Says:

    Oh….and…..ah—–where is that case citation little buddy????? LOL

  83. spension Says:

    PBGC only covers the private sector. And when they take over ALL the 6 figure pensions are wiped put-max pension at the PBGC is $54K at age 60, if they are below age 60 that $54K goes down much further………

    I thought PBGC covered any agency that paid the premiums. I’ve never known whether any public entities elected to pay the premiums and insure themselves… so much variety in local public pension systems in California that I can imagine some municipalities or special districts bought in… unless the CalXXXX systems specifically ban PBGC participation.

  84. SeeSaw Says:

    It pains me to side with Rex, but he is right. The PBGC covers only the private sector.

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