The CalPERS board approved a major rate hike yesterday, $459 million, to replenish state worker pension funds that remain low, even though the stock market has rebounded from a post-crash low five years ago.
The first of three rate hikes to cover the expected longer lives of retirees (2 years added for men, 1½ years for women) will push the state payment to CalPERS to an estimated $4.3 billion in the new fiscal year beginning next July.
As the rest of the rate hike is phased in over the following two years, the total state payment to CalPERS will be boosted to about $5 billion in 2016. Rates could go even higher when new actuarial methods are adopted next year.
CalPERS has been using an unusual “smoothing” method that spreads gains and losses over 15 years and a “rolling amortization” that refinances debt each year. The new “direct” actuarial method is intended to reach full funding in 30 years.
The giant California Public Employees Retirement System serves three groups: state workers, non-teaching school employees and 1,581 local governments, ranging from large cities like Long Beach to small special districts with a handful of employees.
Most of the public attention is on state workers, the largest group with powerful public employee unions engaged with the Legislature and the governor on pay and retirement benefits funded by the state budget.
It’s been a political battleground.
Former Gov. Pete Wilson cut pensions and used “surplus” CalPERS funds to help balance the budget. Unions called it a “raid,” prevailed in court and backed an initiative, Proposition 162 in 1992, giving the CalPERS board sole control of pension funds.
Former Gov. Gray Davis signed landmark legislation, SB 400 in 1999, that restored the Wilson pension cuts and increased benefits (notably for the trend-setting California Highway Patrol) to a level that critics say are “unsustainable.”
As former Gov. Arnold Schwarzenegger in 2005 briefly backed a proposal to switch new hires from pensions to 401(k)-style plans, citing steep hikes in pension rates, CalPERS adopted the radical smoothing policy to avoid future rate “shocks.”
This kind of manipulation may be one reason the CalPERS state worker funds on average have only 66 percent of the projected assets needed to reach full funding in the next 30 years.
That’s slightly lower than the troubled California State Teachers Retirement System, which was 67 percent funded in a new actuarial report this month. CalSTRS lacks the power to set employer rates, requiring hard-to-get legislation instead.
CalSTRS needs a rate increase of about $4 billion a year to project full funding in 30 years. Without a rate increase of some kind, actuaries expect CalSTRS to run out of money in about 30 years, even if investment earnings hit the target of 7.5 percent a year.
CalPERS board members, who can set employer rates, have publicly worried about another stock market crash. Some experts think that if funding drops below 40 percent, getting to 100 percent becomes impossible. Rate hikes would be too onerous.
Two-thirds of the money needed to pay CalPERS pensions in the future is expected to come from investment earnings. The CalPERS pension fund peaked at $260 billion in 2007, dropped to $160 billion in March 2009 and was at $286 billion this week.
Half of the CalPERS investment portfolio is in global stocks. The Standard & Poor’s 500, which dropped to 677 in March 2009, had by this week more than doubled to 1,862. But the big runup in stocks did little for the average state worker funding level.
While the state worker funding level went from just 58 to 64 percent during the last four years, the funding level for non-teaching school employees went from 65 percent to 81 percent, traditionally regarded as adequate.
The CalPERS board yesterday set a rate hike of $55 million for the school pool, bringing the total payment for the new fiscal year to $1.2 billion. The big longevity rate hike for schools does not begin until 2016, and then will be phased in over five years.
At the urging of Gov. Brown, the CalPERS board in February adopted the new longevity projection for state workers immediately with a shorter three-year phase in of the resulting rate increase.
Brown said the CalPERS policy (a two-year delay followed by a five-year phase in) would cost the state $3.7 billion more over 20 years. The CalPERS board deferred to the governor on state workers, but followed its policy on schools and local governments.
Asked about the difference between the state worker and school funding level, David Lamoureux, CalPERS deputy chief actuary, said the school funding level has been higher for decades for a number of reasons.
For example, he said, the CalPERS board agreed to extend the amortization or payment period for state worker plans debt or “unfunded liability” to 40 years in the early 1990s to ease the strain on the state budget.
He said more recently the retirement rate has exceeded projections among state peace officers and firefighters and the Highway Patrol. Retirements did not drop as expected with the end of a Highway Patrol incentive, an 8 percent benefit increase.
“Schools are a much bigger group,” Lamoureux said. “A lot of them tend to work part-time. They tend to have earlier retirement ages. We see less swing for schools on a year-to-year basis, and that makes it easier to predict.”
The board took several actions under Brown-backed legislation, AB 340, that created the Public Employees Pension Reform Act on Jan. 1 last year.
New hires covered by the reform in the Legislature and CSU peace officer and firefighter plans will contribute an additional 0.5 percent of pay to CalPERS, bringing the total to 11 percent of pay.
The reform made similar small pension contribution increases for members of current state workers in several plans. The state savings from the higher contributions, expected to be nearly $100 million, will be used to help pay off CalPERS debt.
A decade ago CalPERS put about 1,400 small plans, each with less than 100 active members, into 10 “risk pools” to protect small employers from a big rate increase caused by an industrial disability or other event.
By requiring lower pensions for new hires, the pension reform forced CalPERS to temporarily create two large risk pools for miscellaneous and safety workers. Now staff is proposing a change that would cause some employers to pay more and others less.
But the new plan would give local governments something many have asked for but could not do under the old pools: pay down their pension debt or unfunded liability if they choose to do so.
At the request of the chief actuary, Alan Milligan, the board delayed action on the plan to allow time for a CalPERS webinar with the League of California Cities to explain the proposed changes to local governments, an attempt to build support.
Reporter Ed Mendel covered the Capitol in Sacramento for nearly three decades, most recently for the San Diego Union-Tribune. More stories are at Calpensions.com. Posted 17 Apr 14
Calpensions 
April 17, 2014 at 9:19 am
Good stuff, Mr. Mendel.
If only I knew where to begin. I think I’ve said it all before – we are in for a big financial hurt which will culminate in a severe financial strain on all levels of state government. Local governments will be hit the hardest. Our already failing school districts – in comparison to others, will be decimated by the pension cost increases from CalSTRS (over 100%) and CalPERS (over 50%).
The CTA and other public employee unions have already pushed our cities & county’s to increase every fee they can think of including additional parcel taxes, UUT taxes, and outrageous school bonds (have you read what’s in some of these bonds), which have become the new slush fund replacing the now extinct Redevelopment Agency’s.
“As former Gov. Arnold Schwarzenegger in 2005 briefly backed a proposal to switch new hires from pensions to 401(k)-style plans, citing steep hikes in pension rates, CalPERS adopted the radical smoothing policy to avoid future rate “shocks.” ”
– CalPERS has done anything and everything to ensure pension costs wouldn’t interfere with governments, at every level, ability to increase wages. What CalPERS gas done is artificially lower cost which provides the appearance of a better balance sheet at the local level, which allows city councils to justify increasing compensation. Of course increased compensation also increases the unfunded pension liability but nobody at CalPERS cares because they believe the taxpayers guarantee every penny they blow.
The sooner taxpayers understand that public employee unions are the driving force behind increased taxes, fees, and bad policy decisions that effect both our cities and school districts, the better off we will all be.
April 17, 2014 at 10:12 am
“CalPERS board members, who can set employer rates, have publicly worried about another stock market crash. Some experts think that if funding drops below 40 percent, getting to 100 percent becomes impossible. Rate hikes would be too onerous.”
– When is Jerry Brown going to require that the CalPERS Board is (A) required to be qualified and (B) required to represent the interests of taxpayers who, according to the bogus “California Rule” are responsible for every stupid decision made made by the under-achieving and unqualified CalPERS Board of Stooges.
“Two-thirds of the money needed to pay CalPERS pensions in the future is expected to come from investment earnings.”
– that “Two-thirds” is 100% Bull Crap!
April 17, 2014 at 11:21 am
“New hires covered by the reform in the Legislature and CSU peace officer and firefighter plans will contribute an additional 0.5 percent of pay to CalPERS, bringing the total to 11 percent of pay.
The reform made similar small pension contribution increases for members of current state workers in several plans. The state savings from the higher contributions, expected to be nearly $100 million, will be used to help pay off CalPERS debt.”
– I’m sorry – BUT, I can’t imagine that “The state savings from the higher contributions, expected to be nearly $100 million, will be used to help pay off CalPERS debt” comes anywhere close to covering the already ridiculous payments on the current unfunded pension liability, or the scheduled 50% taxpayer increase on the already ridiculous tax payer burden. My guess is the 100 million in savings is only a slight offset of the 1 BILLION in increased costs. It sounds good though.
My city keeps making the same claims about how they’ve decreased cost saving us money. But when you really look at it isn’t true. They’ve only reduced cost by a small amount with an offsetting wage increase that isn’t included in their “cost savings” speech. They also provided an additional paid leave (2 more weeks of paid vacation which doesn’t show up in their calculations because it doesn’t change the rate of pay) which increases overtime costs – paid at time and one half. The contract rate stays the same but the cost of service increases.
April 17, 2014 at 1:19 pm
(1) Quoting … “Former Gov. Gray Davis signed landmark legislation, SB 400 in 1999, that restored the Wilson pension cuts and increased benefits (notably for the trend-setting California Highway Patrol) to a level that critics say are “unsustainable.””
“Critics say” ?
How about ANYONE with a shed of common sense and 6-th grade math abilities ?
———————————————————————
(2) Quoting … “Two-thirds of the money needed to pay CalPERS pensions in the future is expected to come from investment earnings. The CalPERS pension fund peaked at $260 billion in 2007, dropped to $160 billion in March 2009 and was at $286 billion this week.”
Hogwash. Investment returns FOLLOW principle in proportion to the employee/Taxpayer principle contributions.
In the absence of these grossly excessive pension promises and the need for Taxpayers to make 80-90% of total principle contributions, 80-90% of those investment returns would have stayed in the Taxpayers’ pockets, perhaps to help fund their much smaller retirements.
The ROOT CAUSE of the financial mess we are in is the grossly excessive pension promises ….. AT LEAST 2x greater in value at retirement than those of comparably situated Private Sector workers making the SAME pay, retiring at the SAME age, and with the SAME years of service, MOST OFTEN 3x-4x greater, and for safety workers OFTEN 4x-6x greater.
———————————————————————–
Taxpayer have been financially “mugged” by the Public Sector Union/politician cabal for decades.
ALL reforms to date have been a financial joke. In these Defined Benefit Public Sector pensions can’t be frozen (the better choice by far), for ANY material impact, the pension accrual rate for all CURRENT workers must be AT LEAST halved and all COLA increases must end. They would STILL be greater than Private Sector pensions and Private Sector pensions never include annual COLAs. What makes Public Sector workers more deserving of a far better deal ?
Taxpayers … demand change …. and REFUSE to fund ANY pension promises greater than what YOU get from your employer.
April 17, 2014 at 2:55 pm
Captain, With CA’s judges participating the in same Plans (and wanting to preserve their own RICH pensions), little will be accomplished at the State level.
At the County, City, and municipal levels, eventually change will take place via bankruptcy … as costs increase, services decline, taxes go up, and productive tax-paying residents and businesses leave exacerbating the downward spiral.
This won’t work out well for BOTH the Taxpayers and the workers.
April 17, 2014 at 4:26 pm
It is a mistake to just look at “funding levels.” From 2011 to 2012, Pacific Grove’s assets grew over five million dollars, but its liability(to pay pensions) grew by 20 million dollars. So its unfunded deficit grew by about 15 million dollars in a stellar stock market. John M. Moore
April 17, 2014 at 4:37 pm
Correction: Instead of “funding levels”, I meant “asset growth.” John M. Moore
April 17, 2014 at 5:28 pm
Isn’t it nice to see that the state can come in and raid your pension fund anytime they want and then raise your contribution to make up the money that they stole!! If the state would have kept their hands out of the fund to begin with, the rate hikes would never have been needed.
Now the state wants to make the pensioners out to be the “greedy bad guys” because their legally earned pensions are unsustainable. Must be nice to be able to play both sides of the field and make everyone, but you, the politician, out to be the cause for failure……..
April 17, 2014 at 6:00 pm
Driver, Your serious denial or lack of understand of how generous, costly (and grossly unfair to Taxpayers) your pension plans really are is quite obvious … as is that you are likely riding this gravy train and don’t want it disrupted.
The greed of your Unions and workers such as yourself will certainly be coming back to bite you … big-time.
April 17, 2014 at 6:03 pm
The state hasn’t been able to raid the pension fund since the era of Pete Wilson, Driver. The voters put a stop to that with an initiative.
This is about the fact that many public entities stopped making their pension contributions in the early 2,000’s because they had been told by CalPERS that the stock market was going to keep gaining and contributions would not be necessary from the employers. Neither CalPERS nor the employers saw what was coming–the global financial collapse of 2008.
Its not the State that is trying to make the pensioners out to be the “greedy bad guys”– it’s the right-wing pundits and the public sector- hater, commenters who are doing that. Don’t get your dandruff up–all is going to be fine.
April 17, 2014 at 6:41 pm
SeeSaw, It MIGHT be “fine” for those like yourself in their 70s, but for actives and younger retirees it would CERTAINLY be wise to factor pension reductions and healthcare subsidy elimination into their retirement planning.
April 17, 2014 at 8:29 pm
Healthcare has never been a rock-solid promise and many retirees never had and never will get such subsidies. CalPERS pensions are protected by law and will continue to be protected by law until the law changes. Don’t hold your breath, because you would expire before that ever happens.
April 18, 2014 at 3:05 am
We should all vote for the “The 2016 pension reform act” proposed by Mayor Reed of San Jose. This proposal will give employers the negotiating tools to negotiate the appropriate changes necessary to save there particular plan.
April 18, 2014 at 6:42 am
No, we should not, Shelby! The proposed act is a constitutional amendment. Those types of actions should never be made lightly. The State’s Public Employee Pension Reform Act of 2013 is now effective. It was a statutory law–done the right way. You can forget about the 2016 pension reform act. Mayor Reed does not have wide-spread support from other government officials throughout CA. He has the support of four other Mayors who have had their own troubles with solvency in their, respective, cities–he has received a letter in opposition from 25 Mayors and other municipal officials in CA. His proposal is complete folly–he needs to retire to a desert island and never be heard from again!
April 18, 2014 at 7:16 am
I’m not that worried about tax hikes–Prop 13 is still mostly untouchable, even for retail property. Our roads and bridges will collapse and our schools will crumble. Good–public workers have to drive over those roads like the rest of us and send their kids to the same schools and unaffordable colleges (UC has a big pension problem, too). This article about the terrible restrooms in SF schools would be sad if it weren’t so funny. Apparently they passed a bond to do a little repair work — or I should say they passed a bond that was really more money for teachers’ pensions.
http://www.sfgate.com/education/article/Schools-Rest-Rooms-in-State-of-Disrepair-2950374.php#page-2
April 18, 2014 at 3:57 pm
Seesaw, Would you wager you pension denyiny that most if not all of the 25 Mayors who signed that letter in opposition to Reed’s proposal did so because they were threatened with retaliation by the insatiably greedy Public Sector Unions and their minions ?
April 18, 2014 at 5:52 pm
You have quite a wild imagination, TL. I was a member of an employee association for many years. We were never in any meetings with the locally elected officials, except that a PAC committee interviewed council candidates and gave the one they decided to endorse $300 to help them fund their campaign; the union reps met with management once a year and the resulting MOU was voted on by the members and put before the elected leaders for ratification. Threatened by retaliation? You are living in the wrong universe, TL! This is not New Jersey!
April 18, 2014 at 8:27 pm
SeeSaw…. Extreme denial ……….
April 18, 2014 at 8:31 pm
SeeSaw Here’s the video you should watch:
http://unionwatch.org/seiu-spokesperson-threatening-california-lawmakers-with-union-retaliation/
April 18, 2014 at 10:15 pm
I don’t have to watch it TL. I’ve already seen it. Telling an elected official that he/she will never get their vote again if action x, y, or z is taken or not taken, is standard political rhetoric. You are the one who is in extreme denial. You even try to fool yourself into believing that you are not a hater when it comes to the public sector and when it comes to your fairy-tale thoughts of what goes on in union meetings.
When there are multi-billionaires like Sheldon Adelson handpicking candidates and spending hundreds of millions of dollars from their own petty cash to have them elected, you have no leg to stand on when those benefactors are compared beside the thousands of individual workers coming together and pooling their own resources, in effort to achieve their desired political outcomes. What billionaire are you working for, TL?
April 18, 2014 at 11:32 pm
SeeSaw, Now you didn’t really thing I would let you get way with such outright BullSH**, lying as to the content of that video did you?
Here are the EXACT words from the Union mouthpiece:
“The power, the backing, helped many Democrats get into office who would not have done so without the assistance of the Home Care Worker’s Union. We helped to get you into office and we’ve got a good memory, and come November, if you don’t back our program we help to get you out of office.”…
And in your little mind, that outrageous THREAT is simply ….
“Telling an elected official that he/she will never get their vote again if action x, y, or z is taken or not taken,”simply”
On what planet ?
If what she said … to an elected official, on an official stage … is not illegal, it should be. And if it’s not legal, she should be prosecuted.
——————————————————————
And SeeSaw, YOU are a hater of Private Sector taxpayers because you selfishly demand that they continue to overcompensate Public Sector workers to their detriment via continued pension accruals FAR FAR greater than necessary, supportable, or justifiable. The relevant adjective is piggish, and the noun is pig.
April 19, 2014 at 2:25 am
“CalPERS board members, who can set employer rates, have publicly worried about another stock market crash. Some experts think that if funding drops below 40 percent, getting to 100 percent becomes impossible. Rate hikes would be too onerous.”
If this corrupt and underqualified Board of Administration is worried, shouldn’t everyone be worried?
April 19, 2014 at 3:25 am
There is no such thing as a private sector taxpayer, TL. This country has taxpayers–that is all of us!. Go back to your little desk in Sheldon’s wing now.
April 19, 2014 at 4:24 am
I should be so lucky …………
April 19, 2014 at 5:25 pm
@ Read it SeeSaw: I am worried all right–worried about us getting into another Cold War, and eventually getting blown up! And, yes, I am worried about another economic collapse. That said, you need to stop hallucinating about all the economic boogey-men who are coming to get you. Let’s go on with our daily lives and do our best to sustain, without trying to take economic stability away from those who have it.
April 19, 2014 at 9:06 pm
SeeSaw, sometimes a Constitutional amendment is necessary because the legislature is unwilling or unable to act. Proposition 13 is a good example. During the next few years local governments will feel the pressure or the increased employer rate of 50% by CalPers. This will force the issue. The proposal by Mayor is a reasonable tool stressed governments can use to save their employees retirement from “Bankruptcy”. The proposal does NOT force anybody to do anything.
April 19, 2014 at 9:24 pm
Oh yes it does! You better read it. It requires each public entity to make reports on how they are, respectively, going to reach full funding by a determined year. It ends collective bargaining as we know it. It is a dangerous initiative–forget it!! Take care of yourself and don’t be concerned about what to do, to shaft others!
April 20, 2014 at 2:19 am
SeeSaw, It’s comments like the above why readers think you are delusional…
(1) Quoting …” It requires each public entity to make reports on how they are, respectively, going to reach full funding by a determined year.”
You say that like it’s a bad thing. No it’s not, it’s called responsible financial management. But perhaps from a Public Sector Union’s perspective (whereupon they don’t care one bit for the Taxpayers), yea, it is a bad thing … for THEM.
(2) Quoting …”It ends collective bargaining as we know it.”
Collective Bargaining as now structured in CA (along with the “California Rule”) are incredibly one-sided, strip the Legislative Branch of functions that rightfully belong to it, and prevents even the most minor of desperately needed reforms.
Key to your statement are the words “as we know it”, which for (the “we”) the Public Sector pigs riding this gravy train, means that the stranglehold they now enjoy MIGHT be diminished IF the city is in dire straights and IF the Unions refuse to negotiate in good faith.
No rational person would agree with your quoted statement.
(3) Quoting …”It is a dangerous initiative–forget it!”
Dangerous ? How so and to whom ?
“Forget it” … Not a chance !
(4) “Shaft others” ?
The Public Sector Unions/workers have been giving the TAXPAYERS the “shaft” for decades.
April 20, 2014 at 4:29 am
SeeSaw, you have obviously drank to much of the union “cool-aid “and are lost. The way things are the only way out is Bankruptcy or radical changes in the retirement benefits. You only have to look at what is proposed in Ventura County (Social security and a 401K for all new hires) or San Diego and San Jose. I encourage anyone to read the Reed proposal it is reasonable and gives employees the tools they need to save their defined benefit retirement from extinction.
April 20, 2014 at 7:53 am
Well its obviously something more than “cool-aid” that you’ve been drinking, Shelby. I was never an activist in my own association and I have been retired for seven years now and don’t belong to any union. My only interest here is that of standing with the workers that you are trying to shaft. I will stay vigilant in that effort, much to your chagrin I’m sure.
April 20, 2014 at 4:50 pm
With each new (and generally more irresponsible) comment, I wonder more and more whether SeeSaw is really a 70+ year old 40-year service retired CA Public Sector worker (as she states), simply stating her opinions (delusional as they may be), or possibly the creation of Public Sector Union damage control.and PR.
April 20, 2014 at 8:53 pm
SeeSaw,if you were really a friend to the public employee you would help with a solution so the employee could keep the defined benefit retirement. I suspect you are a right wing radical that delights in seeing fiscal calamity causing the public employee retirement benefits to be slashed and eliminated. you SeeSaw are no friend to the public employee.
April 20, 2014 at 11:29 pm
You both have rampant imaginations! I will state again–I have no union connections–not that there would be anything wrong with that. I am a CalPERS annuitant, in my 7th yr. of retirement. I am a moderate, slightly to the left, and only on these forums to do my part in seeing that those of your kind do not mess with the DB pensions. You will obviously both continue to bleep until the cows come home–even though the DB pensions in CA are protected by law and you have no way to change that. I have the privilege of casting votes in the State of CA. Do you? Since I was a public employee for 40 years and 8 mos. of my life, in California, there really is no reason for debate about my devotion, or not, to the public sector. They know–it doesn’t matter what you think.
April 21, 2014 at 1:01 am
SeeSaw, It’s NOT about you (or hubby with the pint-sized but quite typical PRIVATE Sector pension you keep complaining up).
It’s about fixing a “problem”, that problem being that the pensions promised all CURRENT (as well as retired workers) Public Sector workers are unnecessarily generous (by any reasonable measure), and grossly unfair to Taxpayers called upon to pay for 80-90% of Total Plan costs, are the proximate cause of the STEADY decline in Gov’t services (especially at the local level), are unsustainable, and for which many will fail catastrophically without BENEFIT-LEVEL reductions.
April 21, 2014 at 4:32 am
No, it’s not about me. Its about the Rule of Law and about what the likes of you are trying to do to flout that. I don’t need anything–I said previously, and of course you ignore all I say, I am only on these forums doing my part to see that you don’t get your way! Because, after all, TL, none of this is about you!
April 21, 2014 at 6:02 am
SeeSaw,
You’re right that it’s not about you or me, but it IS about fixing that problem (above) …….no matter how misguided your thinking that your allegiance to those who followed you into the Public Sector MUST be paramount and unwavering.
April 21, 2014 at 6:24 am
SeeSaw you are hopelessly lost. There are many taxpayers that want nothing done to save the defined benefit public employee retirement. They find it hilarious that the “Unions” don’t want the tools (Reed proposal). These taxpayers will be happy to watch the retirement systems implode. These systems are simply to expensive as they are to save. The irony is the inability to change the benefit formulas for current workers that you see as a protection of your benefits is and will become if unchanged the thing that will cause the complete undoing of the defined benefit retirement.
April 21, 2014 at 2:17 pm
You obviously don’t know that there was a pension reform act passed in 2013 by the Legislature. The benefit formulas were changed for new hires. That’s all that can be done without a constitutional amendment. It just sticks in your craw that those who were already covered with plans will keep those plans until they change jobs or until they retire. I’m here to support and to work against any effort to amend the Constitution of CA. TL is not even a resident of CA. I doubt you are too. Now is your chance to come clean–are you are resident of CA, or are you living in some red state where you have nothing better to do than meddle in the business of other states?
April 21, 2014 at 3:12 pm
SeeSaw, I comment on pension reform articles because, being very well versed in pension design and funding, I knew LONG ago that one day these plans would become a HUGE problem …. and I’m trying to do my part to educate as many readers as possible to advance the timing of REAL reform that WILL ultimately come (it MUST, as it’s a MATH problem).
Thank goodness NJ’s “retroactive” formula increase (of about 9%) wasn’t quite as stupid and egregious as the MUCH larger retroactive increases in CA.
I’m also a Private Sector Taxpayer, and while the direct incremental costs to me (to pay for these grossly excessive, unnecessary and unjust pension & benefit promises) is manageable, there are huge numbers of private Sector Taxpayers for which it is a growing burden, not just in the from of increased taxes, but in the from of reduced services.
At your age, you’ll like see only some of what’s sure to come to CA. Unfortunately, as Shelby say if your desires to substantive delay the material change that MUST eventually come pan out, all that you (and those of similar ilk) will succeed in doing is hurting your younger lower service associates by MORE than what might have been necessary.
April 21, 2014 at 5:46 pm
I’ve been reading SeeSaw’s posts for years and can assure you she is not a right wing radical plant, nor is she an enemy of the public employee.
Reed’s proposition will not pass in 2016. It was not done in by Kamala Harris. It was not done in by “the unions”. Reed’s proposal wants to bypass collective bargaining and give governments power to unilaterally impose conditions on its workers. It is doomed to failure.
SeeSaw is countering some of the gross exaggerations and misconceptions posted on these boards.
She is correct, PEPRA was passed and IS reducing pension costs, though not as much as you like. In addition, there have been hundreds of NEGOTIATED contracts in the last few years which have reduced pay and pensions for public employees. (Make that ” greedy” public employees)
” CalPERS board members, who can set employer rates, have publicly worried about another stock market crash.”
Haven’t we all? When it comes, it will affect everyone, not just CalPERS, and it will NOT be caused by “the unions”.
“Powerful Public Employee Unions” is an oxymoron. Unions are not the boogieman, they are a straw man. That inane Union watch video is meaningless. First, we don’t know that she is a “spokesperson”, or just a woman in a purple shirt. Second, her claims and threats are irrelevant. Union political campaign spending pales in comparison to spending by business interests. Although unions may be the largest SINGLE contributors, in overall contributions they are outspent by as much as fifteen to one.
……………………………….
” grossly excessive pension promises ….. AT LEAST 2x greater in value at retirement than those of comparably situated Private Sector workers making the SAME pay, retiring at the SAME age, and with the SAME years of service, MOST OFTEN 3x-4x greater, and for safety workers OFTEN 4x-6x greater.”
Whoa!!! deja vu!!!
TL math notwithstanding, you cannot evaluate pensions outside the context of total compensation.
…………………
” Investment returns FOLLOW principle” (sic)
True. Once again, when the taxpayers contribution has been transfered to CalPERS, it is MY principal, therefore MY return on investment.
The ” landmark legislation, SB 400 in 1999″, has mostly been reversed for new employees, and for many existing employees and retirees, the gains in formulas have been more than counteracted by losses to inflation.
April 21, 2014 at 6:48 pm
Great cleanup, SMD!
April 21, 2014 at 11:10 pm
S. Moderation Douglas,
Re your last paragraph, your logic is interesting. Considering that almost ZERO Private Sector plans include COLAs, eliminating the COLA (even if for ALL current actives and retirees) would ONLY put Public Sector workers on par with their Private Sector counterparts with respect to that SINGLE issue (COLAS).
And even if the full formula increases of SB400 (and all OTHER retroactive increases) were reversed (clearly an impossible long-shot until … not if … Plan failure arrives), Public Sector Plans would STILL remain at least 2x more valuable at retirement than their Private Sector counterparts.
Material reform WILL come (because politics can’t solve MATH problems with fake solutions), just WHEN is uncertain.
Perhaps, when the smoke clears, SeeSaw’s children and grandchildren (let to pick up the pieces) will say ….. “thanks for nothing, Mom”.
April 22, 2014 at 1:33 am
It’s a math thing.
Private industry pay…wages and salaries: 70.1%………..benefits: 29.9%
State and local govt…wages and salaries: 64.5%………..benefits: 35.5%
It is entirely possible to have nearly equal total compensation AND have much better pension.
………………
More specifically, according to BLS:
Private industry retirement and savings: 3.7% of total compensation
State and local government retirement: 9.4% of total compensation
These are just averages, but if public workers have a higher percentage of compensation in pension in lieu of cash, AND typically contribute more toward pensions than private sector, their pension WILL be higher.
Total
Compensation
Is
Roughly
Equal
April 22, 2014 at 3:16 am
S. Moderation Douglas,
BS statistics….and you know it. Cash compensation in the Public/Private Sector is very near equal (for all occupation combined), while Public Sector pensions & benefits are ALWAYS multiples greater in value at retirement .
Here’s just one SINGLE example … Public Sector retiree healthcare subsidies (that VERY VERY few private Sector workers get) are estimated to have a value equal to a level annual 12%* of pay.
Adding in their pensions will easily triple that advantage (and MORE for safety workers).
* Source: http://www.aei-ideas.org/2014/02/resolving-one-debate-on-public-sector-pay/
Specific quote from that source:
“California’s actuaries calculate that in 2011 state employees earned around $2.2 billion in future retiree health benefits and their total wages were around $18.01 billion. So those benefits are worth around an extra 12% in wages. This is compensation that private sector workers rarely receive.”
April 22, 2014 at 3:44 am
S Moderation Douglas I don’t know where you get your information or do you just make it up. In San Jose veteran police officers benefits are 81% of payroll, that’s 81,000.00. With overtime many are paid well over 200K. $200,000.00 plus with a high school education. If you don’t believe it google “Transparent California” and type in any employer. In what world do you live where this is ok, or sustainable?
April 22, 2014 at 3:47 am
Well said, TL.
April 22, 2014 at 5:49 am
“And you know it.”
LOL
apparently the impartial American Enterprise Institute has “resolved the debate”
And yet, I’m sticking with:
Total
Compensation
Is
Roughly
Equal
With the generally accepted stipulation that, as a rule, the lowest paid approximate one third of public workers earn MORE than equivalent private sector workers.
The middle third of public workers are roughly equal in TOTAL compensation.
And the highest third of public workers make significantly less than their private sector equals.
April 22, 2014 at 5:55 am
No Shelby, I didn’t make anything up.
I wonder how many San Jose policemen actually have just a high school education?
April 22, 2014 at 6:35 am
The numbers are what they are. That bastion of rampant liberal leftist wackos (The Heritage Foundation) doesn’t argue the base data.
“After controlling for observable skills and a detailed list of personal characteristics, state workers in California earn about 10.2 percent less in wages than private-sector workers.”
http://www.heritage.org/research/reports/2011/03/are-california-public-employees-overpaid
………..
I like to remind TL of this whenever he repeats “no difference in cash pay”
Spoiler alert: the article does say there is much less difference in LOCAL government vs private sector pay, AND they calculate “as much as” 30% higher compensation for public sector workers when “properly calculating” pension and retiree health care costs. AND the “value” of job security.
And for every conservative study saying public workers are overpaid, there is an equal and opposite study saying they are “roughly equal” or underpaid. Take your pick.
Police and fire are a special case. Hard to find a private sector equivalent. How much are they worth? Many of them got significant increases in the last ten years. Are they overpaid now, or were they underpaid before?
Even some of the biggest critics of public pensions (Josh Rauh, for one, if I can find the quote) will say the pension costs are larger than represented in the media, but will hesitate to say that police and fire are “overpaid”.
April 22, 2014 at 6:38 am
You can’t make this stuff up!
And, the glass is at least half full.
April 22, 2014 at 7:27 am
SDouglas47 Says: And for every conservative study saying public workers are overpaid, there is an equal and opposite study saying they are “roughly equal” or underpaid. Take your pick.
O.K. I say public employees are grossly overpaid. How do you come to any other conclusion when you look at the facts? Have you looked at the public employee union databases regarding conpesation? How does that compare to the median incomes of taxpayers? In most cases these individual public employees are earning more then the median family incomes of even the wealthiest sub-divisions in their county. And the cost hasn’t even been fully realized which brings us to the unfunded pension liability.
Every city tax payer and every cityy council member need to understand the negative impacts unfunded pension liabilities have on their community. The increased CalPERs (Pension) costs reduce the budget for parks, senior center grants, help for the homeless, after school sports, recreation programs for kids, and funding for the needy and Church outreach programs.
Instead those dollars these groups hope & fight for during city council meetings have evaporated to pay for additional dollars toward the salary and retirement benefits of employees that are very genoursly paid. Now, these employees are about to get a 50% raises toward the generous retirement contributions they already receive, at the expense of the taxpayers.
April 22, 2014 at 8:47 am
Wow! I hope you’re not comparing apples and oranges again. I still see articles comparing the overall average public to private compensation, and it is true, according to BLS, private industry employers spent an average $29.63 per hour for total compensation for each worker.
And public employers spent $42.89 average total compensation. (Figures for Dec. 2013)
………….
BUT, compare EQUIVALENTS: public to private attorneys, public to private engineers, public to private truck drivers…. “After controlling for observable skills and a detailed list of personal characteristics, state workers in California earn about 10.2 percent less in wages than private-sector workers.”
I didn’t “come to that conclusion”. That quote comes from The Heritage Foundation. The data comes from the US Bureau of Labor Statistics. The total compensation they compare includes salary PLUS pension and healthcare costs, and the value of vacations, holidays, and sick leave.
The numbers are what they are. Nobody, conservative or liberal, seriously disputes these numbers. (Except maybe Rush Limbaugh, but, as Arnold said, he’s irrelevant anyway)
Where the conservative think tanks disagree is the ” proper accounting” of pensions and retiree health care costs.
And what they call the monetary “value” of job security, which they say is as much as 15% of total compensation.
…………………
Parks and recreation? Church outreach? Children AND seniors? You forgot motherhood and apple pie. Money is fungible. There was something called the great recession. ALL government income was reduced and they were forced to reduce spending across the board. INCLUDING cuts to pay for government workers AND increased pension and healthcare costs paid by those workers.
O. K. YOU say public workers are overpaid (grossly) obviously you are not alone in that opinion. But there is reasonable evidence to the contrary. Don’t shoot the messenger.
April 22, 2014 at 3:18 pm
S, Moderation Douglas. YES, Safety workers are overpaid for reasons clearly demonstrated in (1) and (2) BELOW. Specifically, (2) below counters the argument that the added risks of safety work justify such excessive pensions, as those in FAR more risky occupations, make FAR less, and (1) mathematically demonstrates that a CA PRIVATE Sector worker would need a salary typically 4.62 times GREATER than that of the CA Safety work to get the SAME incredibly generous pension. By ANY measure, that implies a grossly excessive Safety-worker pension.
————————————————
(1) In California the typical recent Pubic Safety retiree’s pension starts at just about $100,000 and is COLA adjusted thereafter. By looking at a table of life annuity factors, such a single life immediate annuity has a value or cost upon retirement of just about $1.8 Million (18 times the annual pension). One way to judge if that is reasonable (or “appropriate and fair”) is to answer the question … What would be the necessary INCOME LEVEL (or Final Average Salary … FAS) of a Private Sector worker with the TYPICAL Private Sector DB pension (for the few Private Sector workers lucky enough to still be covered by such a pensions) to obtain a pension from his/her employer with the SAME $1.8 Million “value” upon retirement ?
Assume the CA safety worker has the typical 3% of final average pay per-year-of-service pension factor, had a final average salary of $111,111, 30 years of service and retired at age 55… resulting in the starting pension of $111,111 x .03 x 30 = $100,000. Next, let’s assume the Private Sector worker’s DB pension formula is 1.25% per year of service (a quite typical formula), is NOT COLA adjusted (routine in PRIVATE Sector Plans), and has a full unreduced retirement age of 62 (with a 4% reduction in pension payout for each year of age that you retire begin collecting your pension before age 62).
For a given Final Average Salary (FAS), this Private Sector worker’s annual pension (P) is given by the formula P = (FAS x 30 x .0125)x (1-((62-55)x.04)), with the latter part of that formula being the adjustment for early retirement at age 55. Shortening that formula, we have P = (FAS x 30 x .0125) x 0.72.
From above, we saw that the Safety worker’s pension (being COLA-increased) has a lump sum “value” of 18 times the annual STARTING pension. With no COLA increases, the lump sum “value” is only 13 times the annual pension. Therefore the Lump Sum “value” of the Private Sector worker’s pension is given by 13 x P, and since we are SETTING that value equal to the $1.8 Million value of the safety worker’s pension we have $1,800,000 = 13 x P, and solving for P, we have P= $1,800,000/13 = $138,462. This Private Sector non-COLA-increased annual pension of $138,462 can be looked at as being mathematically equivalent to an otherwise identical pension starting at $100,000 that includes 3% annual COLA increases (i.e., the Safety worker’s pension).
Now since we know the annual Private Sector worker’s annual pension “P”, we can plug it into my above formula of P = (FAS x 30 x .0125) x 0.72 to solve for FAS. Doing so we have, $138,462 = (FAS x 30 x .0125) x 0.72, from which
FAS = $138,462/(30 x 0.0125 x 0.72) = $512,822
What this shows is that a Private Sector worker (with a TYPICAL DB pension formula and provisions) would need to have a final average salary of $512,812 to generate a pension from his/her employer with the SAME $1.8 Million “value” as the TYPICAL Safety worker pension …. or $512,822/$111,111 = 4.62 times the Safety worker’s salary.
And for the skeptics that say …. this can’t be correct …. we can just reverse the order of calculations and SHOW that this $512,822 PRIVATE Sector salary is indeed necessary to generate a pension with a “value” equal to that (the $1.8 Million) of the Public Sector Safety worker … as follows:
(a) Private Sector worker’s Annual (non-COLA-increased) pension = $512,822 x 30 x 0.0125 x .72 = $138,462
(b) Lump sum value (using the 13 times life annuity factor applicable to non-COLA-increased pensions) = $138.462 x 13 = $1.8 Million
While most reasonable people would suggest that (give the nature of the occupations) Safety workers should receive pensions equivalent to Private Sector workers with salaries say 10% or 25% or 50% greater than they, I find it incredulous to believe that ANYONE would feel it appropriate to provide the TYPICAL CA Safety worker retiree with a pension equivalent to that of the Private Sector worker making over $500,000 annually. Taxpayers (who pay for all but the 10-20% of Total Coat Public Sector pensions typically paid for by the worker’s own contributions and the investment earnings thereon) simply cannot afford anything even remotely close to this level of generosity.
And to preemptively address the anticipated comeback ………… the 4.62 times greater CA safety pension is NOT a function of the Officer’s final pay. It would remain 4.62% even if the officer’s final pay (and hence starting pension) were 10%, 20% or even 50% lower.
The 4.62 time greater CA Safety worker pension results from the MUCH richer Formula and MUCH more generous “provisions” as follows:
(a) Benefit from the richer “formula” of 3% vs 1.25% = 3.00/1.25= 2.40 greater
(b) Benefit from only the CA safety worker getting COLA increases = 18/13 = 1.3846
(c) Benefit from no CA Safety worker pension reduction for full (unreduced) retirement at age 55 = 1.00/0.72 = 1.3889
The above beneficial ratios are multiplicative, giving the overall advantage of 2.40 x 1.3846 x 1.3889 = 4.62 times.
(2) “When discussing public safety compensation, there is an additional layer of complexity – how do we adequately value the premium that public safety personnel deserve as compensation for the risks they take in the performance of their jobs? ”
Public Sector Safety positions (Police, Fire, Corrections, etc.) indeed involve “risks” that the typical Private Sector worker does not encounter, and it is indeed a difficult task to come up with a premium (in pay and/or benefits) commensurate with that risk.
While I do not have a definitive suggestion as to how much that premium should be, we should factor into that discussion the degree of incremental Police/Fire related risks relative to other high risk occupations, and look to the compensation afforded those in more risky occupations for guidance. While surprising to some, Public Sector safety occupations do not find themselves on the US Gov’t Bureau Of Labor Statistic’s list of the 10 deadliest jobs. From a 2013 Forbes article, the list of the 10 most dangerous occupations is as follows:
1. Logging workers
2. Fishers and related fishing workers
3. Aircraft pilot and flight engineers
4. Roofers
5. Structural iron and steel workers
6. Refuse and recyclable material collectors
7. Electrical power-line installers and repairers
8. Drivers/sales workers and truck drivers
9. Farmers, ranchers, and other agricultural managers
10. Construction laborers
April 22, 2014 at 4:12 pm
Let the voters decide.
April 22, 2014 at 4:18 pm
TL, the occupations you list are dangerous because of the non-human hazzards that exist in those, respective, jobs. Occupations such as Police Officer and Firefighter should not even be listed in this category.
April 22, 2014 at 6:18 pm
You could have stopped after “YES”
And that glass is STILL half full.
April 22, 2014 at 7:03 pm
Shelby says;
“With overtime many are paid well over 200K. $200,000.00 plus with a high school education.”
Not to be picky,( some call these “GED cops”), but, according to the SJ website they require “at least 60 semester college credits or 90 quarter college credits from an accredited college or university.” and, since it’s a competitive hiring process, one would assume those who had more than the minimum would have a better chance of being hired.
April 22, 2014 at 7:14 pm
Quoting Sdouglas46 .”You could have stopped after “YES””
Why is that …. because you can’t handle the truth ?
_______________________________________
And PS, your “glass” (your pension) is WAY below half “empty”, and rapidly being drained by the grossly excessive pension continuing to be paid out to current retirees.
April 22, 2014 at 7:28 pm
SDouglas47, the educational level achieved (as you outlined above for police) would get you a $30K job and few benefits in the Private Sector. Even a BS (unless in a credentialed “professional” occupation…. engineer, CPA, IT professional, etc.), would only get you $50 after a few years (and with promotions that only accompany lots of dedication and UNPAID overtime).
In the Private Sector, certain “trades” (electrician. plumber, etc.) can make $50K-$75K pretty quickly, but the also plateau pretty quickly and rarely make much more … and while they may get a MODEST healthcare package while working (hardly the “Cadillac” Plans common in the Public Sector), they CERTAINLY won’t get anything towards retiree healthcare, and if they get anything towards retirement, it would rarely be more than 3% of pay into a 401K Plan.
There are no reasonable measures or comparisons WHATSOEVER that justify anything even remotely close to the “Total Compensation” of safety workers … and just about all other Public Sector workers.
April 22, 2014 at 9:01 pm
“And that” Mrs. Cooper said, “is your OPINION”.
Not to be confused with “truth”.
And I actually have more than one glass.
April 22, 2014 at 10:06 pm
In a nutshell, TL, you are very angry because there is one segment of the population that occupationally earns a sustainable living to take care of themselves and their families. You would not be angry if the public sector were brought down on all levels, according to you, of the private sector, instead of the reverse, because that would only be right. If I had my druthers, I would like to see a few of Adelson’s billions distributed among the public sector workers, so that things would be more even between them and that private sector mogul–especially when it comes to elections. That would only be right, wouldn’t it?
April 23, 2014 at 12:14 am
SeeSaw, Perhaps I will surprise you, but I would like to see perhaps 90% of the worlds Billionaires be forced to give up their wealth for good causes ….. even though a good many of them (Gates, Buffet, Page, Brin, Zuckerberg, etc.*) have earned that wealth far more honestly than the Public Sector Unions/workers ….. who have stolen a good share of their wealth from the Private sector.
* perhaps even the Koch Brothers. I recently read their company’s history, and while I’m sure shrewd business dealings helped make them so successful, I saw no evidence of the outright collusion rampant in the way Public Sector workers have accumulated their pension/benefit wealth.
April 23, 2014 at 3:23 am
“Tough Love”…………. isn’t.
http://www.redletterchristians.org/3-reasons-tough-love-rarely-works/
April 23, 2014 at 4:03 am
You are the King of Insults, TL! Those of us that worked in the public sector all of our years, were just conspiring and stealing from you, while all of the money that dropped into the laps of the others just came to them through their honest good works. Appalling, on the part of your totally skewed thinking!!!
April 23, 2014 at 6:00 am
SeeSaw, Of all people … YOU are the personification of “skewed thinking”.
April 23, 2014 at 1:24 pm
Its manners are as bad as its math.
April 23, 2014 at 4:41 pm
Diirector of IT, retired from our school district: Current pension $137,500 per year. You could run an ad for the job retired from at that rate, and many would apply, but of course this is a pension.
Sweet. It is all about the kids.
April 23, 2014 at 5:54 pm
” the median expected annual pay for a typical Information Technology Director in the United States is $163,129 ”
http://www1.salary.com/Information-Technology-Director-salary.html
Median
April 23, 2014 at 6:01 pm
Many are called, few are chosen.
April 23, 2014 at 6:43 pm
And, the salary and benefits for IT Directors in the private sector is multiple times that of IT Directors in the public sector. Put that in your notebook, TL.
April 23, 2014 at 7:22 pm
SeeSaw, In you had an open mind, you would have looked at that link BEFORE commentating.
Had you done so, you would have found that it’s clearly for ALL workers reporting that “title”, and with 80-85% of all workers being Private Sector, it’s likely close to the Private Sector median.
And, with a Public pension of $137,500 (or 84% of that median pay of $163,129), unless that Public Sector retiree had 35+ years of service, that worker’s pay was likely substantively in excess of the median for ALL such workers.
April 23, 2014 at 11:00 pm
SeeSaw, If you had an open mind, you would have looked at that link BEFORE commentating.
Had you done so, you would have found that it’s clearly for ALL workers reporting that “title”, and with 80-85% of all workers being Private Sector, it’s likely close to the Private Sector median.
And, with a Public pension of $137,500 (or 84% of that median pay of $163,129), unless that Public Sector retiree had 35+ years of service, that worker’s pay was likely substantively in excess of the median for ALL such workers.
April 24, 2014 at 1:20 am
ELL OH ELL
If you had an open mind, you would look at that link and see it’s a nationwide average for private sector IT directors. Type in any major California city and the median pay goes up by ten percent.
Then, say to yourself three times: “I saw it on the web. It MUST be true!”
Like: “we can plug it into my above formula of P = (FAS x 30 x .0125) x 0.72 to solve for FAS. Doing so we have, $138,462 = (FAS x 30 x .0125) x 0.72, from which
FAS = $138,462/(30 x 0.0125 x 0.72) = $512,822”
GIGO
Don’t believe everything you see on the web.
April 24, 2014 at 2:06 am
S Moderation Douglas,
My response to SeeSaw was simply showing her that she incorrectly assumed that the $163,129 was a PUBLIC sector worker average for that position when clearly it was not…. and her takeaway from there was wrong as well.
Do you have a comprehension problem … as you evidently couldn’t figure that out? I guess you’re not one of those “Best and Brightest” we keep hearing about. … also evidenced by the fact that you try to mock or blow-off a very clear mathematical demonstration of grossly excessive Safety-worker pensions. Clearly you haven’t got the grey matter necessary to follow it though.
April 24, 2014 at 2:46 am
I believe you misunderstood SeeSaws response.
And your “very clear mathematical demonstration” is still a joke.
AFK
April 24, 2014 at 3:46 am
SDouglas47 Says:” the median expected annual pay for a typical Information Technology Director in the United States is $163,129 ”
Boy oh boy SDouglas, you sound like you can justify anything. The post you responded to is about the pension of an IT director – you know, someone no longer working for the district but probably making 90K in the private sector based on his her actual skill level while also receiving $137,500 per year in mostly taxpayer funded retirement benefits. How much does one need to earn in compensation to receive $137,500 per year in retirement benefits? A school district hardly requires the same level of skill or hours that are required from any publicly traded company. And those publicly traded companies are very demanding of their salaried IT professionals.
– Mawinda Says: Director of IT, retired from our school district: Current pension $137,500 per year.
California Cities, county’s, and special districts pay way more in total compensation than do private sector companies looking for like skill sets. You do understand, SDouglas, that we are talking about a school district IT professional? How many hours do they actually work? How many days do they actually work? Do they get paid overtime? Is the work environment as dynamic as it is in the private sector?
Again, how do these exorbitant pensions impact school district funding. Because the IT professional is most likely a member of CalPERS we can rightfully assume the pension cost for this individual has doubled in the last 6 years, and will increase by another 50% over the next six years. He’s receiving his pension now but I suspect his plans funding ratio is less than 70%. So regardless of what compensation/salary the person in this school district received to earn a pension of $137,500 it isn’t and wasn’t fully calculated. It is just more of the same – hidden costs in the form of retiree healthcare & pension benefits that have yet to be calculated.
We do know those hidden costs are about to take a huge bite out of school district budgets (right?) – because it’s all about the children!
April 24, 2014 at 4:10 am
S Moderation Douglas Says: I believe you misunderstood SeeSaws response.
Seesaw only Parrots one response. S/He only says what David Lowe tells him/her to say. It isn’t that complicated.
April 24, 2014 at 4:22 am
S. Moderation Douglas,
Actually, that (very clear, step-by-step) long mathematical demonstration (time-stamped April 22, 2014 at 3:18 pm above) is actually little more difficult than basic Algebra that a typical 10-th grader with average abilities should be able to follow quite easily.
It’s very sad that Taxpayers are forced to pay such premium wages, and provide such Cadillac-level pensions and benefits, for Public Sector workers like yourself …….apparently with very limited abilities and comprehension skills.
April 24, 2014 at 4:27 am
TL, I assumed that the figure SMD quoted was a private sector figure. Since it was a higher figure that the one you were quoting on the public IT, I was just having a little fun with you. I actually believe that the typical private sector IT director does make multiple times more in salary than the public counterpart. That is why many public IT directors are trying to go to the private sector. I have no neurosis compelling me to plan a campaign that the two must be even when it comes down to total pay and benefits combined.
April 24, 2014 at 6:40 am
I saw David Lowe speak once at the CalPERS California Dialog. I have never met him in person–but I would certainy like to. I don’t need anybody to tell me what to say Captain–I am in charge of me!
April 24, 2014 at 6:45 am
To add: David Lowe is head of the state classified school employees union. I was never a school employee. Why such grasping at straws, Captain–you do nothing for yourself with such dribble, except to make yourself, presumably a mature adult, seem like a spoiled child.
April 25, 2014 at 12:09 am
Recommended reading …….
http://stump.marypat.org/article/63/public-pensions-watch-it-s-not-our-fault-oh-really
April 25, 2014 at 3:42 am
S Moderation Douglas Says: “Once again, when the taxpayers contribution has been transfered to CalPERS, it is MY principal, therefore MY return on investment.”
– What makes you think that, S Moderation Douglas? When the pension fund was 132 percent funded was that all your money?
S Moderation Douglas Says: “The ” landmark legislation, SB 400 in 1999″, has mostly been reversed for new employees, and for many existing employees and retirees, the gains in formulas have been more than counteracted by losses to inflation.”
– That is complete bull! SB 400 alowed the unions to steal the 32 percent of pension dollars above the 100% funding level that represented TAXPAYER funds/RESERVES in the event of a market downturn. None of that belonged to you or any other Public Employee Union Member, yet those taxpayer $$$$ are now in your pocket/wallet/bank account/or pooled pension plan.
The money was stolen from taxpayers by CalPERS and the Public Employee Unions, with the help of our subservient politicians.
What do you have to say about that?
April 25, 2014 at 4:39 am
Just another right-wing, opinion piece.
April 26, 2014 at 1:58 am
So if the almighty SeeSaw disagrees …… it’s must be ” right-wing, opinion piece”.
April 26, 2014 at 4:42 am
I never pay much attention to SeeSaw. I am interested to hear the response from S Moderation Douglas. He/she seems to think that every penny going to fund pensions belongs to him/her while not wanting to accept responsibility for any of the unfunded liability.
Here is what S moderation has to say: S Moderation Douglas Says: “Once again, when the taxpayers contribution has been transfered to CalPERS, it is MY principal, therefore MY return on investment.”
Of course S Moderation Douglas has nothing to say about the unfunded liability and how that might eventually become his burden. He only believes that the taxpayers are responsible to cover the cost of his pension plans debt.
Captain Says:
April 25, 2014 at 3:42 am
S Moderation Douglas Says: “Once again, when the taxpayers contribution has been transfered to CalPERS, it is MY principal, therefore MY return on investment.”
– What makes you think that, S Moderation Douglas? When the pension fund was 132 percent funded was that all your money?
S Moderation Douglas Says: “The ” landmark legislation, SB 400 in 1999″, has mostly been reversed for new employees, and for many existing employees and retirees, the gains in formulas have been more than counteracted by losses to inflation.”
– That is complete bull! SB 400 alowed the unions to steal the 32 percent of pension dollars above the 100% funding level that represented TAXPAYER funds/RESERVES in the event of a market downturn. None of that belonged to you or any other Public Employee Union Member, yet those taxpayer $$$$ are now in your pocket/wallet/bank account/or pooled pension plan.
The money was stolen from taxpayers by CalPERS and the Public Employee Unions, with the help of our subservient politicians.
What do you have to say about that?
April 26, 2014 at 2:46 pm
CalPERS lost a quarter of its portfolio in the 2008 recession. Those funds were gone; they did not land in anyone’s pocket. No particular person or group stole them! Once you have paid your taxes, nothing that comes from CalPERS belongs to you, unless you are a recipient. Any tax collections that were deposited by the employer of SMD to his CalPERS account, was his money–no one else’s.
April 26, 2014 at 2:48 pm
I should have clarified that those lost CalPERS funds were stolen by the loan sharks, investment bankers, and mortgage brokers, who stole them and more from the American people.
April 27, 2014 at 4:07 am
SeeSaw, And how is ANYTHING related to the 2008 financial crisis an answer to Captain’s point that the 1999 Plan funding excess of 32% was STOLEN form Taxpayers via the RETROACTIVELY applied SB400 pension increases?
Senility setting in ?
April 30, 2014 at 1:26 am
SeeSaw Says: “CalPERS lost a quarter of its portfolio in the 2008 recession. Those funds were gone; they did not land in anyone’s pocket. No particular person or group stole them! Once you have paid your taxes, nothing that comes from CalPERS belongs to you, unless you are a recipient. Any tax collections that were deposited by the employer of SMD to his CalPERS account, was his money–no one else’s.”
And, SeeSAw, you prove once again just how full-of-it you are. As Tough Love mentioned what does the 2008 market have to do with anything that happened in 1999, 2000, or 2001? Those taxpayer funds have, are, an will continue to find their way into the pockets, wallets, and bank accounts of Public Employee Union Members. And, YES – those 10’s of BILLIONS of dollars were STOLEN from what amounts to a taxpayer reserve. And, NO, those dollars didn’t belong to you, Public Employee Union members, or even CalPERS.
CalPERS has a program which lowers the tax payer rate based on excess funding. After CalPERS and the Public Employee Unions STOLE those $$$$ (excess funding) the money that would have lowered our rates went POOF. Now tax payers – CalPERS customers really (and I’m a very dissatified customer of the CalPERS service (oxymoron), are being charged exorbinant rates because of the the theft of the reserve funds, the increased pension formulas, and also a dozen or more additional employee perks that have been added to the list of pensionable income. M yfavorite is uniform and car allowance which, essentialy means, Tax Payers are providing many retirees a clothing allowance or car allowance every year of their retirement, or both.
CalPERS IS Corrupt!
April 30, 2014 at 3:33 am
Captain, I was unaware of the inclusion of uniform and car allowances in “pensionable compensation”. Do they still allow that ?
I would love to hear the (BS) Unions/workers justification.
May 1, 2014 at 12:04 am
TL, regarding uniform allowance CalPERS still allows it to be considered pensionable compensation for current employees. I’m not sure if new employees receive the same perk under the Gov’s version of what he calls pension reform, but I’ll try to find out. For many public safety the uniform allowance is over $1,000. In Vallejo it was over $1,250 before it was reduced. Either way it’s a slap in the face to taxpayers.
Educationaal incentive pay is also a CalPERS pensionable perk. In Vallejo a starting fire department employee would receive about 100K in total compensation in year #1, without calculating the value of lifetime health care which was pay-as-you- go (thankfully they are now limiting the retirement medical benefits to a flat 300 per month – which happenrd during bankruptcy for some of the labor groups). After exting their probatioary period they would receive an additional 5% of pay for 30 units of college credit, and another 5% of pay for having EMT certification. You can’t make this stuff up! You’d think these would be minimum requirements for a position with such great compensation.
Regarding the car allowance being considered pensionable compensation I’ll have to let you decide. Technically it’s no longer allowed under the CalPERS plan, but that doesn’t mean it isn’t embedded in the contracts of the employees. You’ll probably understand waht I mean when you read the link below. IMO, the car allowance is alive and well even if it’s called something else. When you consider every city uses already inflated comparison city wages to justify compensation… here’s the link regarding car allowances. You be the judge: How San Ramon Manager Constructed His Huge Pension
http://www.nbcbayarea.com/blogs/prop-zero/How-San-Ramon-Manager-Constructed-His-Huge-Pension-102779354.html
As far as the County/Large City plans go – it’s the current version of the Wild-Wild-West where anything/everything goes. And on that note, I hope you’ve looked at: http://www.countypensionreform.org/
Regarding the last Calpensions article, it is really about CalPERS and their Corrupt Board trying to drill loopholes into an already very weak pension reform effort – Gov. Jerry Brown’s pension reform effort.