Gov. Arnold Schwarzenegger signed a state budget yesterday that calls for lower pensions for new state workers, rolling back a “mistake” made a decade ago when a CalPERS-sponsored bill, SB 400, gave state workers a major benefit increase.
A record 100 days into the new fiscal year, it’s a hard-won victory for the outgoing governor, who vowed in January not to sign a new spending plan without the budget and pension reforms he has sought since his early years in office.
The proposal for a “rainy-day” budget reserve to give the state a financial cushion during economic downturns goes on the ballot in 2012, a constitutional amendment if approved by voters.
But the pension reform is only legislation, which unlike a constitutional amendment can be overturned by legislation — and that’s what happened when the Legislature passed SB 400 in 1999.
The new state budget calls for a rollback of the SB 400 pension formulas, returning them to the lower level enacted under former Gov. Pete Wilson in the early 1990s.
What the governor is calling “historic” pension reform legislation might dampen a drive for an initiative that would switch new workers to a 401(k)-style individual investment plan, mentioned by Republican gubernatorial candidate Meg Whitman.
An official of the trendsetting Highway Patrol union, a leader among the first bargaining units to agree to rollbacks earlier this year, said publicly in January “the last thing we want to do is leave it to the initiative process.”
The pension reforms called for in the new state budget are similar to cost-cutting contracts already negotiated by the Schwarzenegger administration with seven unions representing about 132,000 of the roughly 193,000 rank-and-file workers.
But the reforms have to be bargained with unions representing the remaining 60,000 workers. More than half are represented by the California Correctional Peace Officers Association, which has been without a contract since July 2007.
Schwarzenegger issued an executive order Thursday imposing the pension changes on about 35,000 supervisors and managers, who are not represented by unions and collective bargaining.
The big immediate savings for the state is an increase in the annual contribution that state workers make to their pensions, which ranges from an additional 2 to 5 percent of pay under the contracts already negotiated.
The largest state worker union, the 95,000-member Service Employees International Union Local 1000, agreed to a contract this week that would increase employee contributions by an additional 3 percent of pay, up from the current 5 percent.
The state’s contribution for these “miscellaneous” workers was increased by the California Public Employees Retirement System to about 20 percent of pay this fiscal year, also up 3 percent from last year.
The pension benefits of current state workers are protected by contract law and cannot be cut. Long-term state savings are expected to come from lower benefits for new hires, a “second tier” rolling back benefits to the pre-SB 400 level.
For the miscellaneous state workers the new hires would receive 2 percent of “final pay” for each year served at age 60. Current workers receive a more generous 2 percent at age 55.
“This was a hard-fought negotiation but we proved that collective bargaining works,” SEIU Local 1000 President Yvonne Walker said in a written statement. “We reached an agreement that helps the state maintain services, during this unprecedented fiscal crisis, while providing stability for our members.”
The Highway Patrol negotiated a “3 at 50” pension formula in SB 400 that set a statewide trend for police and firefighter pensions. Earlier this year the Highway Patrol agreed to a lower formula for new hires, “3 at 55.”
But it’s still more generous than the pre-SB 400 Highway Patrol formula, “2 at50,” which provided 2.7 percent of final pay for each year served at age 55.
The new state budget attempts to curb “spiking,” the manipulation of final pay to boost lifetime pension payments. A budget deal two decades ago is said to have made California the only state with final pay based on a single year.
The new budget bases final pay on the highest consecutive three-year average of salary, rather than the single highest year.
Schwarzenegger signed a budget with an $86.6 billion general fund, which purports to close a $17.9 billion shortfall with a patchwork of deep spending cuts, revenue transfers and loans, and optimistic forecasts of federal funding and tax revenue.
“These are tough economic times;” he told a Capitol news conference yesterday. “We are just going through three years of the biggest recession since the Great Depression. So I’m proud that we used this crisis as an opportunity to pass major reforms, reforms that will help ensure that we never have to suffer through a crisis like this again.”
The governor said the pension reforms “undid, basically, the mistakes that were made by the legislature in 1999 by passing SB 400.”
He said state payments to CalPERS soared by “more than 2,000 percent” in the last decade. The annual payment was $1.2 billion in 1997, dropped to $150 million in 2000 during the high-tech boom, and is about $3.9 billion this year.
With the CalPERS payment and other payments of $1.4 billion for retiree health and $1.2 billion to the California StateTeachers Retirement System, the total state retirement cost this fiscal year is about $6.5 billion.
For the first time, said Schwarzenegger, the annual state retirement cost is more than the state budget for higher education.
“This is why we had to do something about it,” he said. “Pensions have become the silent thief of our treasury, gradually stealing more and more money from various different areas like education, higher education, public safety, infrastructure, parks and the list goes on and on.”
CalPERS has been criticized for telling legislators that the pension benefit increases in SB 400, which included a retroactive raise for retirees, could be paid for by investment earnings, leaving state rates little changed for a decade.
“There were people that pulled wool over their eyes,” said Schwarzenegger. “They never really knew all the facts and the risks that were involved. Now this will be eliminated, this problem. We will have full transparency moving forward.”
When CalPERS sets annual contribution rates for the state, the new budget requires alternative forecasts of what would happen if earnings are lower than expected, assets are valued at market rates rather than actuarially “smoothed,” and periods for paying off obligations are altered.
Reporter Ed Mendel covered the Capitol in Sacramento for nearly three decades, most recently for the San Diego Union-Tribune. More stories are at https://calpensions.com/ Posted 9 Oct 10
Calpensions 
October 9, 2010 at 11:32 pm
The biggest Bull about pensions is that contract pensions can’t be cut. There are no cases that say that. Most certainly a state does not have to go broke because it mis-spoke,but that would be true if pensions can’t be reduced for current workers. And of course,there is nothing except politics, to prevent a 50,60,or 70% cut in pay,which would achieve pension reduction for current workers
October 10, 2010 at 1:22 am
John Moore said it correctly.
And quoting from the article …”The pension benefits of current state workers are protected by contract law and cannot be cut. Long-term state savings are expected to come from lower benefits for new hires, a “second tier” rolling back benefits to the pre-SB 400 level.”
You can repeat this 100 or 1000 times, but it won’t change the outcome …unless pensions & benefits are SERIOUSLY cut for CURRENT (yes CURRENT) employees, California will be insolvent in 3-5 years and suffer tremendous losses in truly needed service while on the way.
October 10, 2010 at 5:29 am
John Moore
The biggest Bull about pensions is that contract pensions can’t be cut. There are no cases that say that.”
You are mistaken. Try:
Central Laborers’ Pension Fund v. Heinz, 541 U.S. 739 (2004), US Supreme Court decision. The last time I recall the US Supreme Court overturning their own (1940) decision was in 1943.
Contracts are covered by Article One Section 10 Clause One of the US. Constitution.
The Contract Clause prohibits states from enacting any law that retroactively impairs contract rights.
The above 2004 Supreme Court decision says any new legislation that impairs contract rights retroactively is null and void on its face.
October 10, 2010 at 2:38 pm
Quoting Charles Sainte Claire …”Contracts are covered by Article One Section 10 Clause One of the US. Constitution. The Contract Clause prohibits states from enacting any law that retroactively impairs contract rights. ”
Your statement is incorrect in the sense that it implies the impossibility of contract impairment.
Although not easy, contracts CAN be impaired if “reasonable and necessary”. And IN ADDITION, States always retain the right to modify contracts under their “police powers”.
You can read all about these options in this excessent research paper …
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1573864
Where you and I disagree, is that I believe we will (in certain jurisdictions … areas of California certainly being included) reach the tipping point in 3-5 years where contract impairment will indeed be “reasonable and necessary”.
October 10, 2010 at 2:57 pm
Chap 11 in bankruptcy routinely allows pension reduction as part of a plan of re-org. That occurred in the recent Gen Motors bankruptcy. The parts of Chap 11 that allow pension reduction(even elimination) are incorporated into Chap 9. My point: If it is constitutional to reduce pensions in a Chap 9,or a Chap 11,there can’t be a federal constitutional limitation on states that can’t be overcome. Suppose the voters of Ca. passed a constitutional initative that specified that our state constitution allows government workers pensions to be reduced and/or eliminated,regardless of any other provision in the state constitution. Certainly that would meet federal constitutional requirements. Regardless.of the constitutional issues, substantial salary reduction for state and local gov. employees is the sure-fire pension reform. I don’t know the percentage of reduction necessary to save Ca. but start at 40% and do the math.
October 10, 2010 at 8:47 pm
Show me just one case where current worker government pensions have been cut by a court.
Not private sector. Public sector. Just one case.
I will monitor this thread for your reply.
October 10, 2010 at 8:49 pm
JM: Cities and counties can only go Chapter 9, and if you have been watching the saga in Vallejo, would know why others are not jumping into that frying pan.
Good god, if my salary had been reduced by 40 percent prior to my retirement, I would have ended up with barely enough to pay the medical insurance premiums for me and my spouse.
The problems of the pension system need thoughtful solutions–not hypothetical hate rhetoric. If the principals are left alone to continue the collective bargaining processes, they will solve it on their own.
October 10, 2010 at 9:24 pm
Quoting SeeSaw …”If the principals are left alone to continue the collective bargaining processes, they will solve it on their own”
“Collective bargaining” with Public Sector Unions got us into this mess (via Union greed and corrupt/enabling politicians). Such “bargaining” has never solved anything and never will.
It’s WAY past time to FORCE-FEED the significant Pension and Benefit reductions necessary and deserved.
October 10, 2010 at 9:25 pm
Dear Marwick … checkout Prichard AL for Pension reductions.
October 10, 2010 at 10:31 pm
Central Laborers’ Pension Fund v. Heinz, 541 U.S. 739 (2004), US Supreme Court decision. The last time I recall the US Supreme Court overturning their own (1940) decision was in 1943.
Contracts are covered by Article One Section 10 Clause One of the US. Constitution.
The Contract Clause prohibits states from enacting any law that retroactively impairs contract rights.
=============
The SCOTUS reverses itself allt he time, I can name several cases within the last decade, such as Bowers v. Hardwick being overturned by Lawrence v. Texas as just one recent example off the top of my head.
Public employees have NO right to have their pensions locked in stone going forward, maybe for past service-but not going forward. The states could freeze ALL pensions and institute a new plan goign forward.
October 10, 2010 at 10:33 pm
Show me just one case where current worker government pensions have been cut by a court.
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OK, You asked for it (and BTW-this was a Federal BK Court-applies all across the USA):
http://www.clipsyndicate.com/video/play/1470765/5_20_prichard_pension_plan
October 10, 2010 at 10:37 pm
JM: Cities and counties can only go Chapter 9, and if you have been watching the saga in Vallejo, would know why others are not jumping into that frying pan.
Good god, if my salary had been reduced by 40 percent prior to my retirement, I would have ended up with barely enough to pay the medical insurance premiums for me and my spouse.
==================
Seesaw, Vallejo is owned by public unions, it i s a miracle that they even filed BK given the strangle hold the PD and FD have on their city clowncil-where the average cop comps $220K before OT and the average FF comps $250K before OT.
You could cut the HIGH salary jobs and have a tremendous savings-and since the pensions costs would not be going up if you cut the salary, you coudl take the excess money to shore up the pension system.
I agree that ANY cuts need to be progressive, those making the most take the biggest cuts (40%), while those at the bottom take little to no cut (0-15%).
October 10, 2010 at 10:39 pm
Vallejo did not ask for pension relief,but it is clear the judge would have granted it,if requested. Your point about a given MOU or contract has some validity,except in Chap 9. But MOUs’ expire and after expiration there are no vested rights going forward. Here in Pacific Grove we just enacted pension reform limiting the Citys’ contribution and total liability to 10% of salary,but it does not apply to the existing POA contract until the current MOU expires. Then it applies and the Council cannot provide a bigger benefit or liability without a vote of the citizens. We hope the police unions will sue in state court,so the City can finally vent all the pension corruption that led to this state of affairs. I truly expect some of those involved in enacting 3@50 and certain raises will do jail time after the story is finally told.
October 10, 2010 at 10:42 pm
That occurred in the recent Gen Motors bankruptcy. The parts of Chap 11 that allow pension reduction(even elimination) are incorporated into Chap 9. My point: If it is constitutional to reduce pensions in a Chap 9,or a Chap 11,there can’t be a federal constitutional limitation on states that can’t be overcome
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The GM BK did not touch 90% of the pensions, the unionized pensioners, it ONLY hit the non union, white collar employees, and that was done on purpose b/c Obama was bankrolled by the unions.
They should have cut ALL the pensions. The american poor and middle class should not be on the hook back stopping the pensions of a private sector company where the employees were already far ahead of the average employee in pay and benefits.
As for states, they can repudiate/break/violate ANY of their own contracts whenever they want to-they are immune from lawsuit in both state and federal court-that gives them the unique ability to renege on any pensions they owe, and not be held accountable.
October 10, 2010 at 11:19 pm
Actually, I believe The gov’t deal making GM keep the Union Pensions was nothing more than a delaying tactic to ultimate get larger pensions for the GM workers.
Now follow my logic …
Had the Plans been turned over to the PBGC upon reorganization, many of the retirees & workers near retirement would have taken huge percentage cuts in their pensions because of the low retirement ages in GM. This is the case because the PBGC payout limits are a function of age at the time of Plan termination. For example, a 55 years would get no more than in the low $20K range annually, perhaps a 50+% cut in their formula pension.
GM’s Pension Plan is STILL a basket case and will likely default at some point. But, much of the staff has moved on, and in 5 years those 55 will be 60 and if Plan termination happens then, the % cut in payout might only be 25%. If if happens in 10 years, few of the union workers will have any cuts.
This was the indirect way the Gov’t protected the Union pensions WITHOUT raising the PBGC limits … which would have been WAY TOO OBVIOUS and would bring up past and future calls for “me too”….. think steel & airlines !
October 10, 2010 at 11:49 pm
I feel sorry for the public retirees of Pritchard Ala. It is obvious that the Plan in Pritchard Ala. was not set up like the various DB plans in CA. Fake, please stop using Pritchard as an example of what awaits retirees, or potential retirees, in CA. A Pritchard-type scenario is not going to happen in CA. We are too big and too organized compared to Pritchard.
You can put Governor Swartzeneggar’s spoken words in your memory bank and refer back to them whenever you propose cutting the benefits of current workers:
“It is not possible, both legally or morally, to cut the retirement benefits of current state workers”.
October 11, 2010 at 12:24 am
Seesaw, If he said that he’s a fool.
October 11, 2010 at 12:28 am
I’ll qualify my last comment …. Pensions accrued for PAST service should not be reduced, but when there is a genuine need to do so (as is the situation NOW), pensions accruals for FUTURE years of service for CURRENT workers should (and in Califfornia’s case MUST, if it is to avoid insolvency), be subject to reduction.
October 11, 2010 at 1:03 am
TL: I saw the speech at the time, but my rewording might not be exact. That was the intent of his words, regardless.
I am now retired, but I cannot imagine the Powers That Be arbitrarilly decreasing the retirement formula of the current workers. That would be totally wrong–don’t expect to see that happen–there would be lots of class action lawsuits, just like what we have already seen between the Governor and the Unions.
I would think that the 90 million dollars spent on the court cases regarding the furloughs could have been better utilized. There would have been no need for lawsuits, if the furloughs had been agreed upon in collective bargaining.
The colleagues at my former place of employment have been required to take furloughs for the past year and for the coming year. It was all agreed upon and signed in collective bargaining; then, it was presented to the governing body at the calendared public meeting, for approval.
October 11, 2010 at 3:27 pm
I truly expect some of those involved in enacting 3@50 and certain raises will do jail time after the story is finally told.
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3%@50 should have never in a million years been approved, and when it was approved NEVER have been applied retroactively, that was fraud plain and simple.
October 11, 2010 at 3:31 pm
Governor Swartzeneggar’s spoken words in your memory bank and refer back to them whenever you propose cutting the benefits of current workers:
“It is not possible, both legally or morally, to cut the retirement benefits of current state workers”.
==============
Arnold has been one of the biggest flops in modern time Seesaw. he is off base thoug, he is no legal scholar either.
I have NO problem canceling benefits going forward. I have NO problem cancelling retroactiely granted benefits.
I would never discount any pension that was fully paid for and in place when actually working-so all the 3%@50 scams during the last 10 years that have been earned I would certainly allow, but not a red cent for any that were given retroactively-I would freeze 3%@50 when the current contracts expire and replace them going FORWARD with a DC or 1%@67 AND a DC combo-similar to what the feds do.
October 11, 2010 at 3:57 pm
Dear Fake SeeSaw,
Great suggestions ! I agree 100%.
October 11, 2010 at 4:51 pm
I think Tough Love has it right, according to Amy Monahan at the University of Minnesota future accruals may be altered. Check it out and see if you agree.
CLAWING BACK DEFERRED PAY: THE COLORADO GUIDE
Obviously, legislators around the country are not quite as sophisticated as their counterparts in Colorado. It has never occurred to them that they could just pass a bill stating “Oh, by the way, we are no longer bound by our contractual pension obligations.” Simplicity itself! This approach makes life much easier in difficult budgetary times, and takes the burden off of GASB, state and local governments, plan sponsors and the SEC!
Under the Colorado pension “contract breachin’ plan”. . . . . you simply seize vested, accrued, earned, contracted benefits from retirees and pension members (incredibly, with the help of your local union lobbyists . . . . toss those retired union brothers under the bus) until your unfunded pension liabilities are sufficiently reduced to raise your funded ratio. This plan also improves the status of your bonded debt (keepin’ those SEC fellas happy).
If you’re as brazen as we are in Colorado you claim that your goal is to achieve a 100 percent funded ratio, instead of the 80 percent level that is considered well-funded in the industry. May as well go for the full 100 percent, no one understands all this pension mumbo jumbo out here in the west.
The 100 percent goal provides lots of wiggle room for unexpected investment shortfalls, or more convenient under-funding in the future. Also, here’s another ingenious provision that we invented. If it happens that God provides you with a lame pension investment staff, they consistently underperform their benchmarks (I estimate that last year we underperformed by about a billion), and accordingly you have an investment loss for the year, no problemo, just state in the bill you enact that retiree contracted benefits will be further cut to accommodate the loss! My guess is that when pension investment staff around the country hear about this sweet no-accountability gig they are going to beat a path to Colorado PERA. Where can I get that kind of a job? To be fair, credit for finding this solution should go to the bright administrators at Colorado PERA. You can imagine how difficult it is psychologically to advocate a course of action that you yourself have earlier declared illegal, (see this excellent Denver Post article.) http://www.denverpost.com/news/ci_11105271
We know it’s burdensome for busy pension administrators (particularly short timers) to have to tell elected officials that they really ought to make their annual required contributions . . . it’s much easier to just let those unfunded liabilities build up year after year after year, until you have a good pile, and then wipe the slate clean with a good contract breachin’!
Our Colorado PERA pension administrators are straight shooters. They’ve been telling us for a couple years now, “We can’t invest our way out of this.” Now they’re keeping their word . . . by missing their investment performance benchmarks by wide margins.
Meeting contractual obligations? Performing your fiduciary duty? Acting in a moral fashion? No need to fret about these things. We’ve looked into it in Colorado and dang if these things haven’t been optional all along. Hello state and local governments . . . round up those rascally debt problems and herd ‘em out west to us in Colorado, we’ll fix ‘em right good fer ya!
(Visit saveperacola.com for more info.)
October 11, 2010 at 7:26 pm
Hey Algernon Moncrief – you have posted your stupid spam at least 50 times on Pensiontsunami.com websites going back 2 weeks, stop posting it, we do not need to see it 50 times. once is enough, FOR ANYONE.
October 11, 2010 at 9:49 pm
Fake, you are already Fake OCO. You don’t need to be Fake Seesaw too.
October 11, 2010 at 11:05 pm
I just love to see Rex the Wonder Dog posting here as FakeOCO and FakeSeeSaw. It would be even better if he had anything new, relevant, or correct to add to the discussion.
ToughLove clearly doesn’t understand that CalPERS and the State of California are not one in the same entity. Unlike New Jersey, or wherever he’s from, CalPERS is constitutionally independent from the state government and legally required to aggressively protect the benefits of its members, active and retired.
Nobody is going to retroactively cut pensions for anyone currently working or retired. We all know it no matter how much shouting goes on.
Even under austerity budgets, pension payments get paid. That’s a good thing.
October 11, 2010 at 11:15 pm
Skippy, my good friend is RWD, leave him out of this!!!!!!
October 12, 2010 at 12:02 am
Quoting SkippigDog …”CalPERS is constitutionally independent from the state government and legally required to aggressively protect the benefits of its members, active and retired.
By “protect the benefits of its members, active and retired.”, I’m guessing you mean to “act in their best interests”, as opposed to simply making certain the Plans assets are appropriately invested.
I’m wondering if you are correct in saying the second part of thid, specifically …”… and legally required to aggressively protect the benefits of its members, active and retired.”
Of course we all KNOW that CalPERS DOES act this way (in Plan participants’ best interests), but (a) is it legally required to do so, and (b) should it be doing so if NOT legally required to do so.
CalPers is the administrative arm of the pension system … by which I mean it it called upon to administer the laws/regs./rules as passed by legislative bodies with the authority make such laws/regs./rules . As such CalPERS charge should simply be to “ADMINISTER” already quantified direction. Of course this shouldn’t mean that it will never have a decision to make, but decisions IT makes only be “administrative” and never of the type that could grant additional benefits or favor Plan Participant over Taxpayers.
I’d wager to say that SkippingDog is incorrect, and that CalPers is NOT “legally required to aggressively protect the benefits of its members, active and retired.”… (in the sense of “acting in Participants’ best interests). I am also of the opinion that while we all know that CalPERS in fact DOES this, it has NO BUSINESS doing so, and should do little more that administer the Plans as written.
October 12, 2010 at 4:46 am
You have to remember that 2/3’s of the Calpers board consists of pulbic employees.
I think the gov appoints one or two seats- so if the gov is a democrat then you essentially have 75% of the board being public employees. As a result the Calpers board is essentially nothing more than an extenion of CA public employee unions.
There is no doubt the board, and the fund itself, has a fiduciary duty to the members by keeping the fund solvent, which includes making sure the fund is not taking excessive risks, which they are certainly doing today.
That is why SB400 was such a scam, the Calpers board violated their fiduciary duty by asking for SB400, and then implementing it. SB400 has wiped out a large % of Calpers funding level, it’s solvency, by creating retroactive debt.
I do not know if Calpers has a fiduciary duty to the members other than making sure the fund is solvent.
October 12, 2010 at 4:45 pm
Take a little time, Tough Love, and look at the CalPERS fiduciary duties spelled out in the California Constitution. CalPERS has some easy to follow links on its website, so you should be able to catch up with the class in less than an hour.
October 12, 2010 at 6:13 pm
CalPERS was as rich as it had ever been in its history, in October of 2007. It wasn’t SB400 that wiped out $100,000,000 of the CalPERS portfolio in 2008-09. It was a global, financial catastrophy that occured, as a result of the sub-prime mortgage fiasco.
October 12, 2010 at 7:09 pm
CalPERS was as rich as it had ever been in its history, in October of 2007. It wasn’t SB400 that wiped out $100,000,000 of the CalPERS portfolio in 2008-09
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Seesaw, if SB400 had never been passed then the $100 BILLION loss would not have undefunded Calpers, it would have still had a positive funding ratioof 130%, but instead of a 130% funded ration it dropped to a 68% funded ratio b/c of SB400.
So you are wrong, SB400 did cause Calpers to be wiped out, and the market fall didn’t help.
October 12, 2010 at 8:00 pm
OMG, you are so smart Fake! I just can’t understand why you aren’t on the CalPERS payroll. Such could have saved us so much agony!
October 12, 2010 at 10:22 pm
Quoting SkippingDog …”Take a little time, Tough Love, and look at the CalPERS fiduciary duties spelled out in the California Constitution. CalPERS has some easy to follow links on its website, so you should be able to catch up with the class in less than an hour.”
I’ve always been and will always be ahead of you class … in all ways.
And I have no vested interest to protect with lies, half-truths, and irrelevant diversions.
October 12, 2010 at 10:59 pm
OMG, you are so smart Fake! I just can’t understand why you aren’t on the CalPERS payroll. Such could have saved us so much agony!
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Seesaw, I would NEVER, in a million years, be allowed to sit on Calpers Board, b/c they KNOW I would not play ball with the scams-scams like SB400 is a perfect example.
SB400 should have never been passed. Pensions were FINE before SB400, there was NO reason to pass it. Raising pensions, retroactively, by a WHOPPING 50%??????????????? Please!
Dumbest move ever made in Calpers history.
I think you know that too-b/c that scam is putting your modest pension in jeopardy. Do you think those cops and FF’s care about you and your $40K pension when they are scamming $3-$5 million pensions at age 50?????? You KNWO they don’t.
October 12, 2010 at 11:00 pm
Tough Love Says:
I’ve always been and will always be ahead of you class … in all ways.
============
TL, Skippy has the brain power of a 3rd grader, so that aint saying much 🙂
October 12, 2010 at 11:39 pm
Fake, I doubt very much that my pension would be touched, even if “you” win the Moorlach appeal. Without the retroactivity allowed by SB400, my pension amount, at the time of my retirement, would have been 19% less that it is, if the enhancement had not been retroactive. I would owe CalPERS approximately $27,540 up to this point for the, according to you, purported “overpayments”.
As Jerry Brown has written in his Amicas Brief regarding this situation, the Legislature has made all pension enhancements, for the past 97 years, retroactive. So, if the 1999 Bill were ruled unconstitutional, all of those pension enhancements previous to it, over the course of that time, would also have to be ruled unconstitutional.
Jerry Brown has already stated that he is willing to consider proposing that new pension enhancements be made non-retroactive. That would be much less draconian and more fair than doing away with DB plans altogether.
October 12, 2010 at 11:54 pm
Fake, when you say that the public safety retirees are getting three to five million dollar pensions, you are speculating that they are all getting $100,000 per year and are going to be collecting that for over 30 years. That is hyper-speculation. Retirements are paid out month by month, and one year at a time. (If I collect my current pension amount for 20 years, I would have received a million dollars, and after that I will be dead.) Who keeps every penny they receive just to add it up to several millions after 30 years? You must drive yourself crazy on all of this.
It has never mattered to me whether or not public saftey retirees care about me and my retirement. My retirement is good. I worked with people in all kinds of positions in my tenure, including public safety workers, and I support all of them.
October 13, 2010 at 6:26 pm
Fake, when you say that the public safety retirees are getting three to five million dollar pensions, you are speculating that they are all getting $100,000 per year and are going to be collecting that for over 30 years.
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Actually, no, I am not speculating, those are the actuarial rates from Calpers, so that is not speculation at all seesaw.
.
.
.
As Jerry Brown has written in his Amicas Brief regarding this situation, the Legislature has made all pension enhancements, for the past 97 years, retroactive.
==============
That does NOT make it legal, even if it is true-and it may not be true.
October 14, 2010 at 7:11 pm
You are, in effect, speculating that the Attorney General is a liar. Can you honestly say, that you have read that Brief? I have to think that you have not even looked at it, because you are not about to read anything you might not like. You are completely resistant to enlightenment of any kind.
October 15, 2010 at 4:58 am
You’ve hit it squarely on the head, SeeSaw. Fake Rex, or whatever the hell he’s going by today, never allows the facts to get in the way of a good rant. He’s positive that he, Tough Love, ocobserver, and the other band of happy nimrods are all much smarter than any of the lawyers, accountants, pension actuaries, politicians, government managers, judges, etc., who have created a solid body of pension law.
October 15, 2010 at 11:34 pm
SkippingDog, Do you realize that a court cannot create money, nor ORDER a tax increase. The latter is a legislative function, and even Democratic (Union A*S*S-kissers) realize there are practical limits.
When the money in the underfunded Plan runs out …. it’s game over. Time for the retired to “man-Up” and go earn a living like the rest of us.
October 16, 2010 at 5:56 am
TL: I did earn a living in my 20’s, 30’s, 40’s, 50’s, 60’s and part of my 70’s. I don’t think its very practical for me to try to go back to work now, for a lot of reasons.
I did check the CalPERS website this morning, and the portfolio stands at 218+ billion. I don’t think it is going to run out anytime soon.
October 18, 2010 at 5:52 pm
Hi FakeSeeSaw:
Have you read Amy Monahan’s law summary yet? Get with the program dude. Which part of this post do you think is “stupid”? Please be more specific. I have a vast reservior of pension materials I could direct you to.
Affectionatly, Algy
CLAWING BACK DEFERRED PAY: THE COLORADO GUIDE
Obviously, legislators around the country are not quite as sophisticated as their counterparts in Colorado. It has never occurred to them that they could just pass a bill stating “Oh, by the way, we are no longer bound by our contractual pension obligations.” Simplicity itself! This approach makes life much easier in difficult budgetary times, and takes the burden off of GASB, state and local governments, plan sponsors and the SEC!
Under the Colorado pension “contract breachin’ plan”. . . . . you simply seize vested, accrued, earned, contracted benefits from retirees and pension members (incredibly, with the help of your local union lobbyists . . . . toss those retired union brothers under the bus) until your unfunded pension liabilities are sufficiently reduced to raise your funded ratio. This plan also improves the status of your bonded debt (keepin’ those SEC fellas happy).
If you’re as brazen as we are in Colorado you claim that your goal is to achieve a 100 percent funded ratio, instead of the 80 percent level that is considered well-funded in the industry. May as well go for the full 100 percent, no one understands all this pension mumbo jumbo out here in the west.
The 100 percent goal provides lots of wiggle room for unexpected investment shortfalls, or more convenient under-funding in the future. Also, here’s another ingenious provision that we invented. If it happens that God provides you with a lame pension investment staff, they consistently underperform their benchmarks (I estimate that last year we underperformed by about a billion), and accordingly you have an investment loss for the year, no problemo, just state in the bill you enact that retiree contracted benefits will be further cut to accommodate the loss! My guess is that when pension investment staff around the country hear about this sweet no-accountability gig they are going to beat a path to Colorado PERA. Where can I get that kind of a job? To be fair, credit for finding this solution should go to the bright administrators at Colorado PERA. You can imagine how difficult it is psychologically to advocate a course of action that you yourself have earlier declared illegal, (see this excellent Denver Post article.) http://www.denverpost.com/news/ci_11105271
We know it’s burdensome for busy pension administrators (particularly short timers) to have to tell elected officials that they really ought to make their annual required contributions . . . it’s much easier to just let those unfunded liabilities build up year after year after year, until you have a good pile, and then wipe the slate clean with a good contract breachin’!
Our Colorado PERA pension administrators are straight shooters. They’ve been telling us for a couple years now, “We can’t invest our way out of this.” Now they’re keeping their word . . . by missing their investment performance benchmarks by wide margins.
Meeting contractual obligations? Performing your fiduciary duty? Acting in a moral fashion? No need to fret about these things. We’ve looked into it in Colorado and dang if these things haven’t been optional all along. Hello state and local governments . . . round up those rascally debt problems and herd ‘em out west to us in Colorado, we’ll fix ‘em right good fer ya!
(Visit saveperacola.com for more info.)