San Bernardino plan: cut or refinance pensions?

CalPERS accuses San Bernardino of halting payments to the big pension fund in a plan to use bankruptcy to cut pensions owed workers. But the city says it’s simply unable to pay now and wants to work out a way to repay CalPERS over time.

A federal bankruptcy court in Riverside is scheduled tomorrow (Dec. 21) to hear a CalPERS plea to block or delay San Bernardino’s eligibility for bankruptcy, a key leverage point for creditors as CalPERS acknowledged in a court filing.

San Bernardino filed for bankruptcy Aug. 1, getting an automatic stay of debts. If the court rules that the city is eligible for bankruptcy, the leverage shifts to the city as it negotiates a plan to “adjust” or cut its debt to emerge from bankruptcy.

The court can rule on whether the plan of adjustment is fair, but cannot impose a plan. As the city noted in a filing: “The court can confirm a plan of adjustment even if some classes of creditors do not approve, a process known as ‘cram down.’”

Vallejo emerged from bankruptcy last fall with an agreement among all creditors, a process that took more than three years. City officials said they considered cutting pensions, but did not after CalPERS threatened a long and costly legal battle.

Stockton filed for bankruptcy last June and has an eligibility hearing scheduled Jan. 8. The city plans to eliminate its retiree health care coverage, but wants to preserve pensions unaltered to remain competitive in the job market.

San Bernardino became the first bankrupt city to halt payments to CalPERS, owing $6.7 million by the end of the month. The debt will total $13 million by next June, possibly $19 million if unions do not agree to pay half of normal costs under a new law.

The California Public Employees Retirement System called down the legal thunder, hiring a consultant to check San Bernardino books and a law firm that used strong language last week in a bankruptcy objection: “sham,” “extort” and “criminal.”

During bankruptcy, the filing said, the city intends “to mislead its employees into believing that they are receiving the full compensation promised to them while intending to reduce their pension benefits through a plan that will be forced on them at a later date.”

City payments to the pension fund are the same as wages, CalPERS argued, and the city plan for operating while in bankruptcy takes money that should go to the pension fund and spends it for other purposes.

“The city’s pendency plan would have the city’s employees continue to provide valuable services to the city, but allow the city to withhold full and prompt payment of the employee’s earned wages by withholding the required contributions to CalPERS,” the filing said.

The city stopped making the employer contribution to CalPERS but has passed along the smaller employee contribution. The term “pendency” used for the plan for operating while in bankruptcy is said to have originated in the Vallejo bankruptcy.

Only debt acquired before a bankruptcy petition is filed is properly protected from collection, CalPERS argues, and filing for bankruptcy should not be used as a cover for running up more debt.

“It is not mere speculation to say that the city may not be able to pay its post-petition bills after languishing in bankruptcy for an indeterminate amount of time,” said the CalPERS filing.

“To the contrary, the pendency plan suggests that the city has no intention of paying its postpetition obligations to CalPERS but, instead, intends to ‘modify’ those administrative claims in its plan of adjustment,” the filing said.

Although CalPERS argues that the city intends to “reduce their pension benefits,” the city pendency plan only mentions the need to maintain “competitive compensation” and an attempt to refinance pension debt.

“Defer the CalPERS payments less the employee withholding and negotiate repayment over time,” said the pendency plan. “Discuss the reamortization of the CalPERS liability with CalPERS actuarials.”

A chart in the 11-page pendency plan issued on Nov. 27 lists the $13 million owed CalPERS this fiscal year among $35 million in deferred general fund obligations, including $15 million owed other city funds.

“Assumes repayment at some future date to be negotiated with creditor and assumes resumption of payments in FY 2013-14,” the chart said of the $13 million owed CalPERS.

“Reamortize CalPERS liability over 30 years (fresh start),” the chart said at another point. “Discussions with CalPERS staff are underway; would realize value of $1.3 million per year starting fiscal year 2014.”

Only a small mid-manager union joined CalPERS in filing an objection to the bankruptcy. The city attorney, James Penman, told the San Bernardino Sun newspaper the city persuaded the three largest unions and bondholders not to object.

San Bernardino contends that a new finance director and city manager discovered in June that the city had a projected general fund cash deficit of $19 million as of July 31 and would be unable to make payroll.

The city blamed years of overspending, the housing bust, a declining local economy, sloppy bookkeeping and generous worker pay and benefits “sometimes significantly above the regional market.”

San Bernardino declared a fiscal emergency and bypassed mediation with creditors, a 90-day effort made by Stockton under a new union-prompted state law that emerged from the Vallejo bankruptcy.

The city said it is negotiating with creditors but needs to cut costs through its pendency plan to avoid service reductions that are “dangerous to our citizens” and threaten the “economic viability” of the city.

“Without restructuring its finances or maintaining the protection of Chapter 9 (bankruptcy), the city could not pay its employees, retirees, bondholders or vendors,” said the pendency plan. “This would result in uncontrolled default and, presumably, a collapse of public services.”

CalPERS said denial of bankruptcy “would not doom the city.” Unlike corporate bankruptcies, said the filing last week, the alternative to bankruptcy for cities is not liquidation of assets: Collecting on court judgments against cities is difficult.

“Denying eligibility may actually speed up the process by forcing the city to negotiate and come up with a plan now rather than just buying time by deferring payments to post-petition creditors,” said the filing.

The filing did not say whether CalPERS would be willing to let the city “negotiate repayment over time “ and get a fresh start to “reamortize” the pension liability over 30 years.

Reporter Ed Mendel covered the Capitol in Sacramento for nearly three decades, most recently for the San Diego Union-Tribune. More stories are at Posted 20 Dec 12

43 Responses to “San Bernardino plan: cut or refinance pensions?”

  1. Tough Love Says:

    Clearly the Court won’t grant CalPERS the right to sue in State Court.

    What IS of concern, is that what results from the bankruptcy may only be a DEFERRAL of payments to CalPERS and not a significant reduction in the promised pensions (for both Past and Future service).

    Clearly w/o the latter reduction, it’s just more kicking the can down the road. These Public Sector pensions are simply unaffordable and must be reduced … here, and throughout CA (and in many other State and City Plans throughout the country).

  2. Mike Genest Says:

    Government is always complicated by politics. That is not the fault of any party or faction. It is human nature that when we put others in charge of things we care about we tend to overburden them with constraints. Were this a private sector situation the company would either cut costs, including pensions and salaries, immediately so it could re-emerge as a viable enterprise or simply go out of business. Governments can not just go out of business. Unfortunately, it is not clear how those in this kind of trouble can re-emerge as viable enterprises either.

  3. SeeSaw Says:

    And, in the meantime, the haters like TL, work diligently every day at proselytizing for public workers to have their legs cut from beneath them, so that they will fall into the same pension pit already occupied by the private sector rank and file. To heck with raising people up–just cut everyone who is upright down, so everybody will be equal then. You are a joy to read on these pages, TL. Don’t know what I would do without my daily cup of snipe and snark.

  4. BOPRN Says:

    SeeSaw –

    Tough Love isn’t what he pretends to be. Just ignore him.

    That said, I do agree with him that future years of service may be up for negotiation should things with the economy continue to get worse – and most surely the economy will get worse.

  5. misguided Says:

    SeeSaw you need help if you rely on TL for getting your daily kicks. Every single sentiment you stated about TL applies equally to you. Get off your high horse.

  6. No Angel Says:

    SeeSaw, you ain’t no angel. If you get off your high horse, perhaps that might help you see the perspective from the taxpayers in the “pit” The deal is quite simple, it is ludicrous for public sector employees to expect their TOTAL COMP to be better than private sector employees. It is not being mean, it is being fair. Another way of being fair is for public sector employess to fight for better TOTAL COMP for private sector employees and force the govt to step in and provide more protections. I have never seen you advocate that? Why? Isn’t it in the interest of public sector employees that private sector TOTAL COMP is at least equal to public sector total comp?

  7. Tough Love Says:

    SeeSAw, You know, one could easlit call you a “Taxpayer-hater”, with 85% of Taxpayers NOT riding the Public Sector Gravy train, yet paying for YOURS.

  8. SeeSaw Says:

    I am a taxpayer myself TL,as well as all the remaining members of my family and most of my friends–so don’t think its very probable that I would ever exude hate toward taxpayers.

  9. SeeSaw Says:

    I have always advocated for people, Angel. I don’t draw any line between public and private sectors when it comes to others. (I believe that the State of CA is trying to lift up the private sector by adopting a plan to get them some DB pensions–that’s compared to the total lack of effort you see in the private sector.) You needn’t try to compare apples and oranges when it comes to the working sectors. You had the same choices as everyone else. I never sought out any job in the public sector, so that I could get a better deal than I would have in the private sector–which I also worked in, by the way. My public sector job paid $1.85/hr. part-time; I never heard of any pension then; I worked at that 11 years before I received a full-time job–lots of conspiring going on there, as you can see.

  10. SeeSaw Says:

    No, Misguided, I am different than TL. I am not sitting in any observation tower in CA looking at, and judging, people in NJ. I don’t care what you think. As long as the blog owners allow, I will not sit here and not comment about the putrid, vitriol you spew at people you don’t even know, just because they made a living in a different sector, than where you made your living.

  11. BOPRN Says:

    SeaSaw –

    It isn’t worth the frustration!! Just be happy and ignore these guys. If you do some research, you will find some of these people are just trolls, others fired from public service, and few have an actual interest in reform of any pension system. Just relax, enjoy retirement and let their blood pressure get high…….

  12. No Angel Says:

    SeeSaw get serious and present some credible arguments. The pension plan created by CA for private sector workers is pure hogwash and nothing more than a smokescreen. It does not have anywhere near the protections that public sector employees enjoy. Projecting yourself as a taxpayer subject to the same concerns as other taxpayers is quite silly and you know it. Yes you are a taxpayer but your interest is either in maintaining the status quo or increasing tax rates to make up for the underfunding of public pensions, not quite the same concerns that other taxpayers have. Your past or anybody’s past is irrelevant as far as the go fwd path is concerned. Anecdotes make good copy but other than that are useless for formulating policy. We’re here now with a broken system, severe underfunding and to top it all in a high tax state. BOPRN I would love to know how you can discern each person’s situation by their posts. What research re you referring to? Perhaps you need to patent it, make a bundle and provide a helping hand to revenue starved CA? 20-30 years back when medical costs were low and life spans were low too, I can imagine that private and public sector pay were on par, with public sector workers forsaking current comp for future pensions. TODAY, the world is lot different. Medical costs are high, insurance cost is high and life spans have increased. The combination of these factors has significantly increased the TOTAL COMP of a public sector worker easily surpassing comparable private sector workers.

    I realize that many public sector workers don’t consider the free or super subsidized insurance premiums that they get as a component of TOTAL PAY but it is. Ask a private sector worker about the healthy bite that Medical premiums exact from a paycheck and you will soon realize that this is not chump change. A system that allows folks to retire in their 50’s with 70-90% of their pay for the next 30+ years, gigantic sick leave and vacation layouts, double dipping, etc is sheer abuse by any definition. While not every retiree has abused the system, what ultimately matters is that the totality of the current load is not sustainable so some level of cuts for FUTURE UNEARNED pension for current employees is needed and perhaps caps too for those yet to retire.

  13. No Angel Says:

    Fired from public service in CA. LOL really. That is a good one. You would have to be total nut job or commit some real crazy stuff to get fired from public service. Do you read the papers? Are you aware of the kind of crap that teachers and other public sector workers commit and get away with.

  14. No Angel Says:

    Here is a super simple question for Seesaw since she was singing praises about the CA govt’s desire to help private sector workers by creating a “pension scheme” Would you be willing to swap your current pension plan for the new one thy was created for the private sector?

  15. SeeSaw Says:

    Your comments about being fired from public service go to show that you know absolutely nothing about the public sector, Angel.

    That question is completely off-topic and so stupid, that is deserves no response–it is N/A.

  16. Tough Love Says:

    No Angel,

    Re your longer comment ….. well stated.

    95+% of Public Sector workers are fully aware that (while their cash pay is no less), their pensions & benefits FAR FAR FAR exceed those of their Private Sector counterparts.

    Public Sector workers could care less about the Taxpayers. It’s greed, pure and simple.

  17. No Angel Says:

    The fired comment was in response to BOPRN’s revelation that he has the power to discern the life situations of posters here! Still waiting on him to reveal this skill and/or seeing some kind of psychic patent filing in the papers.

  18. BOPRN Says:

    No Angel –

    The individual who that is in reference to knows what I’m talking about. As for you, your obviously taking the opportunity to rant against those who work in the public sector. SeeSaw, nor anyone else has done anything that would warrant any attacks.

    You mentioned that nobody can be fired from public service. I know of six individuals fired from the state in the last two months, all from one institution….and there are probably more that I am not even aware of. The state fires plenty of people, some deserving of it, some not. That said – there are a lot that ARE deserving who don’t get fired. You won’t get any argument on that one, but that is true in the private sector also. I’m sure you would agree that public or private, people don’t take their jobs seriously as in years past. It is an example of the new attitude in this country.

  19. Tough Love Says:

    BOPRN, I’m guessing you consider me to be that person because in an earlier comment you said “Tough Love isn’t what he pretends to be”, and in another you said …”If you do some research, you will find some of these people are just trolls, others fired from public service, and few have an actual interest in reform of any pension system.”

    As does “No Angel”, I too wonder how you clearly know the situation and motives of commentators (particularly me).

    I’m certain you do not personally know me, and addressing yours analysis (in the above paragraph) ……

    (1) “Tough Love isn’t what he pretends to be.” Ok, so please enlighten me.

    (2) “some of these people are just trolls”
    Paraphrasing Wikipedia, a Troll ….. is someone who posts inflammatory, extraneous, or off-topic with the primary intent of provoking readers into an emotional response, of otherwise disrupting normal on-topic discussion, or has aim of causing grief to families.

    The great majority of my comments address specific issues re Public Sector pensions or benefits, almost always in the context of their being too generous (when compared to their Private Sector counterparts). I try hard to make statements that I know (from considerable experience dealing with pension design and funding, and well as financial issues in general) are accurate, but also accept the fact that many on the receiving end of these benefits are unreceptive to such. So if doing this “provokes readers into an emotional response”, so be it. I’m certainly not surprised that those who I say should get LESS, get emotional about it, and indeed, we do need to stir the emotions of the complacent taxpayers who have been financially raped by the current structure for far too long. By the way, I purposely used the words “financially raped” to “stir emotions”.

    And, as to causing “grief to families”, if advocating to reduce the excessive pensions promised Public Sector workers causes grief that is beneficially balanced by less grief to the far less fortunate Private Sector Taxpayers (by their having to fund 80-90% of Public Sector pensions …. and yes they do, via their contributions and the investment earnings on THOSE contributions), then yes, so be it.

    (3) “others fired from public service”. I have never worked in any Public Service position, and I have never been fired from ANY position.

    (4) “few have an actual interest in reform of any pension system.” I do indeed, primarily because I believe that the financial promises made (including the accruals for FUTURE service that current workers demand be continued) will ultimately cause untold financial, social and ultimately great civil distress … and there simply will never be sufficient funds to meet these excessive promises.

    While I am also a Private Sector Taxpayer who is somewhat “perturbed” by having to pay the incremental taxes necessary to fund this excess, this plays a VERY minor role in my decision to comment on these discussions.

    The primary reason I BEGAN commenting (perhaps 5 years ago) was, because I understand the pension math FAR better than almost all others, clearly saw where this was going, and that there was a great need to balance the lies and distortion being put forth by the Public Sector Unions and workers…. and the many self-serving/cooperative politicians.

    At this point, while I question whether there is any further need for my commenting (the education level of the reformers and Taxpayers certainly haven risen substantially), I hesitate to end such commenting before seeing MATERIAL reforms put in place.

    Without doubt the first step in those material (and VERY necessary) reforms is to stop digging the hole deeper by either a hard freeze on the existing DB Plans (replaced with a DC Plan with a modest taxpayer contribution “match”), or a VERY significant reduction (of AT LEAST 50%) in the pension accrual rate for FUTURE service. And even doing this STILL leaves us with addressing the existing (huge) underfunded liability for PAST service accruals.

    Lastly, I point out that I have steadfastly called for EQUAL Public and Private sector “Total Compensation” (cash pay plus pensions plus benefits). Once you (Public Sector workers) drop the anger with my reform efforts, it’s really hard to argue that that goal is not appropriate.

  20. BOPRN Says:

    Hi –


  21. Retiring State employee! Says:

    I wish I would have had equal pay when I first started in public service. I went to work for the benefits. I had two young children and another on the way. I moonlighted by doing two or three different jobs, so we could survive. No one wanted these low paying jobs at the time. I have sympathy for the private sector, but a lot of the problems are this liberal State and Country. We support a good portion of the illegal immigrants, and also waste money on many other things. The State of California is ant-business, and don’t get me started on CARB. Carb is going to cost hundreds of jobs with its new regulations.

    I’m actually retiring this month. I’ve earned my retirement, but I can’t say the same for the freeloaders in our society.

  22. No Angel Says:

    BOPRN – I find your perspective and choice of words very interesting. You view my posts as rants and attacks against public sector employees and presumably find Seesaw posts as logical and reasoned. Have you even read a 10th of seesaw’s posts on this forum? Expecting and demanding changes to the system so as to improve things is neither unprecedented nor revolutionary. It has happened before and will inevitably need to happen in CA too. CA might be late to join the bandwagon but join it most certainly will.

  23. No Angel Says:

    Seesaw – still awaiting a response to my super simple question. If the new pension scheme that CA created for the private sector is a great deal why is not an equally great deal for the public sector. As TL says, I too am for equal TOTAL COMPENSATION for private and public sector jobs performing comparable functions. Are you? I suspect you and the great majority of public sector workers are not because you all realize the sweet deal that the public sector has and naturally are extremely resistant to giving that up and joining the private sector in the “pit”. But please do go on and rationalize why the status quo should be maintained? You might even convince me to agreeing to your pov 🙂

  24. BOPRN Says:

    No Angel –

    Are you trying to say you are open minded?

  25. SeeSaw Says:

    No Angel, you flatter me. A 10th of my posts? Currently there are two blogs on these local internet sites that allow me to post –this one and CA Watchdog. I am shut out of the Sac Bee and the LA Times because I do not intend to pay them for the priviledge of accessing their sites, and the other news outlets, where I had participated in the past, have gone to Facebook and other types of social networking, where I do not participate.

    As a retiree who knows a little something about working in the public sector, I feel a duty to do what I can to protect the security of my pension and the pension of others, by responding to those who make comments that are totally false and unfair to those of my ilk.

    I never made comment on what I think about the possible success or failure of the DB pension plan that the state passed for some private sector workers in CA. You had leveled a charge at me, saying that I had never supported better benefits for private sector workers. Well then, you have certainly not read a tenth of my posts for the four+ years that I have been participating on blogs. I have always supported better benefits for private sector workers, in that I think their benefits should be strengthened so that they are similar to those of the public sector. I would have voted against the establishment of the private sector pension plan if I were in the Legislature, because I thought it was the right idea at the wrong time. Only time will tell how it is going to work out. I hope it does.

    I certainly do not advocate that my benefits or those of other public employees should be cut so that they are as low as those of some private sector workers. I did work in the private sector myself for a short time; my spouse is from the private sector as are my children and grandchildren. Its not like I know nothing about it. To accuse me of not supporting that sector is without any facts at hand–only your opinions.

    As far as making both sectors alike and equal when it comes to pay and benefits: Are you advocating for Socialism? We would have Socialism, if things were that way, because our government would have to step in to control the private sector in how it allocates salaries and benefits wouldn’t it? Well, of course I do not advocate such! The private sector must be on its own to formulate its policies–the ball is in that court–not the government’s. If the two sectors are to be equal, let the private sector step up. You better be careful about what you advocate–there are many private sector vocations that pay much higher salaries and benefits than their counterparts in the public sector.

    You seem to visualize public employees sitting around thinking only about their future pensions from the moment they get the job, and consiring in ways to enrich themselves at a cost to the taxpayers–a group to which they belong, themselves. Such thinking is absolutely false. Most public sector employees are thinking only of what they will take home, from their jobs, in order to support their families. Their respective retirements are years in the future, and they have not given it much thought.

    Have some good cheer in the next week if you can. We live in a great county!

  26. Tough Love Says:

    Quoting SeeSaw ..”The private sector must be on its own to formulate its policies–the ball is in that court–not the government’s.”

    Astonishing …. you say this while acknowledging that your pension is MUCH greater and insisting it should not be diminished .

    Do you not realize that the Private Sector workers’ contributions (and the investment earnings thereon) pay for 80-90% of your MUCH richer pension ?

    Where is the fairness ?

  27. SeeSaw Says:

    I acknowledge nothing of the kind, TL! I just say that my own pension should not be lowered to a point where some private workers’ pensions are. There are people in the private sector who have much higher pensions than I. My public pension, when added to my 457(b) and compared with my spouse’s carpenter pension added to his SS benefits is two times more than his–not 4, 5, 6 times, or more. His own DB pension was frozen in 1986, due to the illegal invasion–if not for that one little detail, it would match mine–and there are many workers in the construction industry whose pensions were not frozen, because they were in the commercial end, and not shut out of the union work (that high-rise stuff is too dangerous for illegals) and their DB pensions continued and are as much or more than my pension. You have no valid POV in your continual whining about, “fairness”. Maybe you need to grow up!

  28. Tough Love Says:

    Quoting SeeSaw …”There are people in the private sector who have much higher pensions than I. ”

    BS ……. NOT as a % of pay … which is the proper measurement.

  29. BOPRN Says:


    You would know her situation better than she does – right? You are a pathetic troll, and not to bright at that. I can post a screen capture of you admitting you are a troll if you would like. I have given you clues that would solve a puzzle for you, but one might say it is like talking to a rookie.

  30. Tough Love Says:

    BOPRN, Not sure why you are so angry. I strongly advocate for Public Sector pension reform because I feel it is desperately necessary. Without it, we will be Greece in 5 years.

    I’m not sure if or why I would have referred to myself as a “troll” but if I did so it was either in jest or somehow in the context of the particular discussion at the time.

  31. BOPRN Says:

    Tough Love –

    I am not angry, so don’t try to say that. Just like you don’t know anything about SeeSaw’s situation. You like to state things as fact, making straw man arguments, that have no basis – some would call that trolling.

    While I agree measures need to be taken so we can avoid becoming like Greece, I differ with you on how to attack the problem. As you know, I believe the way to resolve the fiscal balance sheet STARTS with getting those of welfare off of it – cut all welfare (except for the blind or other people with severe disabilities through no fault of their own), cut food stamps, cut programs for illegals, punish criminals in public instead of paying for them to be incarcerated on the taxpayer’s dime. That is where to start. Then cut corporate welfare (you know it exists), cease bribing various countries around the world, cut unneeded military weapons development – the list goes on.

    You would rather attack (and you do attack) those who have simply worked for a living. Did pay get to high for some – yes. Is pay to low for some – yes. But you chose to focus on only the ones who meet your agenda, and ignore the rest. You constantly put out ‘facts’ that have no basis. You state you know far more about actuarial matters than everybody else – you don’t. I remember when your posts started about 4.5 years ago. You had sloppy arguments with a bare understanding of retirement matters. As time went on, you got to be like a child with a toy – you wanted everybody to see that you had it. Problem is – there are some of who remember, and take notes. You only have to slip once for the beans to be spilled, and you have slipped a number of times over the last 4 years.

    All in all – it doesn’t really matter to me. You are just a pathetic, jealous individual who didn’t get yours (so to say). You don’t address the more pressing generational financial matters (welfare for instance) because it does not suit your agenda. On occasion (a few weeks ago comes to mind) I like to play your little game and get you worked up.

    Anyhow – go ahead and respond to all this, it is what you do. Nobody really cares, I can tell you I don’t.

  32. Tough Love Says:

    BOPRN, I agree with you with respect to welfare and Corporate Welfare cuts. The latter is almost always unjustified and I’m sure a significant share of welfare recipients would accept a job (that they now consider beneath then) if they were knew their welfare was going to end (perhaps with a few month warning that is going to happen).

    As to not knowing the subject mater I comment on, we’ll have to disagree on that. Please give me an example of one of my “sloppy arguments” or factually incorrect statements. And if am wrong, I’ll admit it. In fact here is one error I will admit to … in a few comment 3-5 years ago (with a detailed comparison of a public vs private pension calculation) I sated that the inclusion of COLA increases in the Public (but not Private) sector Plan value by 50% (above what it’s value would be in the absence of the COLA). Further study and calculations showed that I overstated that differential and that the 50% is closer to 33% depending on the age at retirement and the particulars of the COLA provision.

    As said earlier, the current (excessive) pension structure needs to be reformed now …. or we will be Greece in 5 years.

    And by the way, you sound like a stalker.

  33. BOPRN Says:

    Tough Love –

    LOL. Just like you to throw out a new accusation/claim/whatever when you have lost any relevance. Stalker LOL. That is great, especially considering you ‘stalk’ nearly every single pension forum in this country and relentlessly badger posters who will not agree with you’re often times twisted line of reasoning. You have a good Christmas now, you have earned it – because you are a ‘crusader’ against the evil forces of those who worked for a living. I feel sorry for you, but just a bit. HO Ho ho….

  34. Tough Love Says:

    BOPRN, Well it certainly seems like stalking me when;
    (1) you state that you have been following my comments (with disdain, no doubt) for 4.5 years
    (2) You say …” Problem is – there are some of who remember, and take notes.” So, you’re “taking notes:” (and saving screen shots, per your earlier comment) of what I say ?
    (3) You make seemingly threatening statements like …”You only have to slip once for the beans to be spilled, and you have slipped a number of times over the last 4 years.”

    Never heard of the 1-st Amendment and “free speech” …. even speech you don’t agree with? I’m not yelling fire in a theater. I’m rightfully exercising my opinion. If you believe I state falsities, don’t just say that. Be specific so I can refute your challenge.

    I also see that you didn’t respond to my above request to …”Please give me an example of one of my “sloppy arguments” or factually incorrect statements.” What, can’t find any …. and you go on to call me …” pathetic, jealous “, and a variety of other unpleasantries.

    Why don’t you admit it … as a Public Sector worker on the receiving end of this Tax[payer-funded gravy train (either already retired and receiving one of these grossly excessive pensions or one still active and hoping to not have it (justly) diminished), you are frightened of my justified efforts to reform this out-of-control structure.

    Well here’s some news that may please you. 4-5 years ago only those well versed in pension design and funding (such as myself) foresaw what was coming and began fighting for change. My efforts to EDUCATE those with lesser understanding were very needed… for example that changes must apply to CURRENT, not just NEW workers. That goal has been 75+% accomplished and journalists, the media, public activists, and even some politicians have joined the effort to fix this mess. My continued commenting adds only marginally to the discussion at this point and I have grown weary of the issue …. so I’ll likely end (or materially reduce) further commentary quite soon.

    If we don’t fix it ….we’ll be Greece in 5 years !

  35. Retiring State employee! Says:

    tough love
    Your a blubbering idiot. I don’t know what happened to you in earlier life. Fired from a State job, or on the take somewhere, incapable of holding down a job? Not all State employees are freeloaders. See my post above. I certainly would have liked to have been paid the same as the private sector at the time.

    Your anguish has deeper roots. I’m not sure where you fit in in society and that may be the underlying problem.

    My last day on the payroll is the 30th of this month. I appreciate you paying for my retirement. Ha! Ha!

  36. Tough Love Says:

    Retiring State employee!,

    Who said ..”all (or even any) State employees are freeloaders” ?

    I said that your pensions are grossly excessive … and I stand by that comment. Looks like I’ve good some good company saying the SAME thing………

    Here is a link to an article titled “The Great California Government Union Swindle” (followed by the 1-st paragraph from that article):

    Are government employees overpaid? A six-part Bloomberg report answers that question with a resounding “Yes.” It also singles out one state as the biggest spender by far: California. This isn’t a case of a handful of isolated incidents. The team of Bloomberg reporters found a pattern of fiscal irresponsibility …”

    P.S. You have an anger (as well as a “greed”) problem.

  37. No Angel Says:

    SeeSaw – Your lengthy rebuttal to my post has so many inconsistencies and logical fallacies that I am perplexed on where to begin my rebuttal. So I won’t because we’re on opposite ends of the spectrum anyway. I did find your comment on socialism very illuminating – I think socialism will actually be a gigantic improvement in CA where the system is so rigged to favor a few.

    As the current resident of the White House likes to say often – this is a math problem. At some point, one runs out of money to satisfy the competing demands for it. On a separate note, people get the govt they deserve. The people of CA have spoken loud and clear by granting the Dems a supermajority, so if the people wish to be fleeced, they most certainly will be. Hats off to Brown and allies for pulling off Prop 30 and winning a supermajority, a master stroke indeed. Takes a tremendous amount of talent in my view to take all of CA’s strengths and bring it to where it is today – apparently there is plenty of that talent in CA!

    All I sincerely hope for is genuine improvement in CA so that we do not see the violent spectacle that can be seen in Greece today but am not optimistic given recent history. When even the will of the people can be challenged in San Jose and San Diego and DEMOCRATIC mayors have to buck the unions, things are seriously broken in this state.

  38. BOPRN Says:

    LOL – Tough Loves pretends to be the victim of someone’s anger. This stuff just can’t be written by a Hollywood writer. Of course that’s when he is not pretending he is the victim of a stalker LOL. OMG is this guy mentally ill. The world revolves around TOUGH LOVE – and don’t forget it!

  39. Retiring State employee! Says:

    tough love, I do not have a greed problem, I just want to get what I have honestly earned. My State pension is not all that much. Yes I do get angry at the stupid things stupid people like you say. I’m going to enjoy my retirement as I have sacrificed a lot for it. As I said keep working hard, pay your taxes and help support my pension. By the way I’ve probably paid more taxes than you ever have.

  40. Tough Love Says:

    BOPRN, I’m still waiting ….

    I also see that you didn’t respond to my above request to …”Please give me an example of one of my “sloppy arguments” or factually incorrect statements.” What, can’t find any …. and you go on to call me …” pathetic, jealous “, and a variety of other unpleasantries.

    If you are looking for pathetic, try a mirror.

  41. BOPRN Says:

    Tough Love –

    Every single one of your arguments is full of fiction. You state in many posts how public employees get 5 to 6 times the retirement of the private sector. That would be sloppy, and it appears in a lot of your posts. I’m OK with what I see in the mirror – a guy who retired after working for the government a bit over 30 years total, living ocean front with a wife who also retired with a nice little pension. We have two fine kittens also. Oh – while accumulating those excessive pensions we managed to build a nice side business of remodeling homes and reselling them, and a corporate hotel (for lack of anything better to call it). Don’t need the pension, but it sure does make the walks on the beach nicer!!! Like retiring RTS said – pay your taxes! But then again, you live in a different state…

    Oh, let’s not forget you are delusional!! From above “My efforts to EDUCATE those with lesser understanding were very needed”. Hey everyone – TL has managed to educate everyone regarding pension funding. Maybe he is the next Peter Schiff, but probably not. LOL

    This is a riot.

  42. Tough Love Says:

    BOPRN, actually what I have stated is that the VALUE AT RETIREMENT of the Taxpayer paid-for share of Public Sector pensions is typically is 2-4 times greater than that of their private Sector counterparts, and often greater for safety workers. BELOW (the stars) is a comment (demonstrating that comparison) that I posted quite a few years back on this very subject.

    I’ll let the readers judge it’s accuracy, not a blowhard such as yourself who feels he “earned” a pension 2/3 of which would likely not have been granted in the absence of his Unions campaign contributions and election support buying the legislators’ votes necessary to pass such grossly excess pensions. Sure, there will be some variation in that excess for State VS City Plans and from City to City, and the extent of healthcare subsidies, but the CONCLUSION will not change.


    Even if you take (the now rare) Private sector worker who still has the old style (ala what Civil Servants have) Defined Benefit Pension, the “formula benefits” NEVER EVER approaches the Richness of what Police & Fireman get. The REAL costs are well hidden in the “details” as I will demonstrate ……..

    A 30 year Private career worker just “might” get a pension annuity of 40-50% of base pay, with NO Post-retirement COLAs, and, if they retire at 55 (vs the more standard 60-65), a 25% “actuarial reduction” in benefits for starting to collect at this earlier age. Also, overtime is NEVER included in pensionable salary in the Private Sector.

    So lets work up a comparison for a California Policeman or Fireman (with base salary of $100,000, $50,000 of overtime, 30 years on the job and now retiring at age 55, with a 3%x30 years = 90% of final pay pension), vs the Private Sector worker.

    The Private sector worker gets a life annuity (with NO COLAs) of (we’ll use the higher 50% figure) 50% of $100,000 = $50,000 reduced to .75x$50,000 = $37,500 due to actuarial reduction associated with payment beginning at age 55. Using an actuarial table of Life Annuity factors, the Present Value (think of this as the up front money it would take to buy this payout annuity from an insurance company) is approximately $37,500 X 14.24 =$534,000. That’s it, there is nothing else.

    The Policeman/Fireman get a life annuity (WITH COLA, the incremental cost of which we will address later) of 90% of ($100,000+$50,000 overtime) = $135,000 annually. With NO post-retirement COLAs, a similar calculation for the Policeman/ Fireman yields (noting that there is no reduction for payment beginning at age 55) $135,000 x 14.24 = $1,922,400.

    So, so far (were aren’t done yet) the “Cost” of the Civil Servant’s pension is $1,922,400 vs $534,000 for the Private sector worker MAKING THE SAME PAY.

    Now lets address the value of the COLA. The mathematics is quite complicated, but a life annuity of $135,000 to a 55 year old WITH post-retirement COLAs (with an assumed inflation adjustment of 3% per year) is roughly equal to a NON-COLA life annuity of $169,800. Therefore, on a apples-to-apples comparison with the Private Sector worker (whose pension is NOT inflation adjusted via a COLA) the upfront cost of the Policeman/Fireman’s pension is $169,800 x 14.24 = $2,427,952 (since the 14.24 Life Annuity factor is applicable to a non-COLA-adjusted pension payout)

    We aren’t done yet …… since we haven’t considered the ENORMOUS cost of (free or VERY heavily subsidized) RETIREE healthcare afforded to the Policeman/Fireman, but RARELY the Private Sector worker. This cost for someone age 55 (10 years before being eligible for Medicare) is truly HUGH. Rough estimates (with 8-10% inflation in medical costs) for Family coverage typically put this cost at approximately $500,000 (more if subsidized coverage continues post-Medicare age).

    So far we have (for the SAME PAY)…..

    COST of the Private Workers Retirement benefits = $534,000

    Cost of the Policeman/Fireman’s Retirement benefits = $2,427,952 + $500,000 = $2,927,952.

    In fairness, Policeman/Fireman contribute a percentage of pay toward their pension (but not retiree healthcare). I could work up an estimate based on assumed year-by-year pay over a career, but for brevity (and since I’m tired of writing), lets assume the accumulated value of these contributions at retirement is $500,000.

    We are STILL left with a TAXPAYER FUNDED $2,927,952-$500,000 = $2,427,952 “cost” for the Public Servant vs a $534,000 EMPLOYER FUNDED “cost” for the Private Sector worker …… BOTH with the SAME PAY.

    Another way to look at this is that TAXPAYER’S are FORCED to pay $2,427,952/$534,000 = 4.55 TIMES as much as the typical Private Sector employer is willing to pay in retirement benefits……… or alternatively …… TAXPAYERS are FORCED (via their TAXES) to provide a pension to Policeman/Fireman EQUAL IN VALUE (i.e., “cost”) to a Private Sector worker making 4.55 TIMES as much pay.

    Isn’t it time for a change ????

  43. Tough Love Says:

    BOPRN, I thought you would like (or more like dislike) my last comment so much I thought I would re-post another from long ago (likely from 4-5 years ago when you started following my comments). I sure you’ll enjoy it just as much … and likely follow up with another brilliant insult.

    You’ll see I foresaw the mess on the horizon. But the financial situation has deteriorated even faster than I had assumed it would. At the end of that comment I said that we should not reduce pensions for PAST service accruals. I now believe that such reductions will be necessary in many cities under severe financial distress, the reduction being the share of the pension that likely would not have been granted in the absence of the Union/politician collusion (the trading of campaign contributions for votes) …. in most cased 50+% of the pension.


    State & City Budgets are stressed all over the nation with supposed one-time “fixes”. Let me tell you something … this isn’t going to be a one-shot fix. Most States, cities, & towns have a FUNDAMENTAL structural problem which MUST be addressed.

    Long ago, Civil Servant “cash” pay was quite a bit less than Private Sector pay in comparable jobs. This justified a better pension & benefit package. Per the US Gov’t BLS, cash pay alone is now higher in the Public Sector than in the private sector. This justifies AT MOST comparable (but certainly NOT better) pensions & benefits.

    More valuable Public Sector pensions comes from multiple sources: (1) higher formula per year of service, (2) basing pensionable compensation on the final 1 year instead of 3 or 5 years of service, (3) including post retirement COLAs, (4) arbitrary end-of-career promotions or excessive raises to “spike” the pensionable compensation, (5) allowing the soon-to-be retired to load up on overtime includable in pensionable compensation, (6) including payouts of unused vacation, unused sick days, uniform, parking, and other miscellaneous “allowances” in pensionable compensation, etc.

    In MOST Corporate Pension Plans NONE of the above are included. Why? Because the cost would have to be paid for by the employer, and none of these being really justified, employers are not foolish enough to waste THEIR money this way. In the Public Sector ALL, of the above are generally included/allowed. Why? Our Politicians aren’t spending THEIR money, their spending YOUR money (via your taxes) while they curry favor for campaign contributions and election support.

    Sometimes, Corporate Sector Pension Plan sponsors realize that the plan is no longer affordable, so they reduce cost via formula reductions, increases in the retirement age, etc., for NEW employees and for FUTURE years of service for CURRENT (yes CURRENT) employees. This is ROUTINE in the Private Sector and is allowed by ERISA (the Federal Law that governs Private Sector Plans).

    Just as in the Private Sector, CURRENTLY EMPLOYED workers in the Public Sector have already “accrued” pension benefits for PAST service. To this will be added benefits for FUTURE years of service. However, in the Public Sector (and there are variations from State to State) the ability to reduce the pension formula for FUTURE years of service for CURRENT employees is “questionable”.

    Of course, the employees and their Unions say it cannot be reduced for anyone already employed (even for those very recently hired). There are many variations, e.g., NJ’s Office of Legislative Service said that cannot be changed only for current employees who already have 5 years of service. In some States, the rules that govern such potential Plan changes are in the State Constitution. In others, in Laws/Regs., and in others via Court Case law.

    One important consideration in examining the DIFFICULTY in reducing pension for (FUTURE years of service ONLY) for CURRENT employees is that the legislators, judges, and staff (such as in the NJ example above) that “opine” that such reductions are not allowed are THEMSELVES participants in these same pension Plans and would be negatively impacted by such formula reductions. Hence, they are hardly disinterested parties, but come with a built-in conflict of interest. These persons should not be making decisions that favor THEM (as beneficiaries of their own decisions) but add to the taxpayers’ burden.

    The financial situation across the country is getting more dire, and the ROOT CAUSE must be addressed. Stated another way, we must once and for all, address the STRUCTURAL imbalance between income and expenses.

    Way too much focus has been placed on the government entity’s neglect to “fully fund” the Plans. This is certainly true (to varying degrees across the nation). What is often given short-shrift is the “expense” side of the income statement. No one ever says …gee … funding a VERY generous pension plan is VERY expensive, and then moves to the logical next questions, that being, is it too expensive BECAUSE it is too generous and perhaps we such make it less generous. But what exactly is “too generous”? Well, given that “cash” pay in the Public Sector now exceeds that of the Private Sector in comparable jobs, maybe a Public Pension Plan that is more than MARGINALLY higher is too expensive.

    Above, I enumerated 6 items which make Public Sector Plans more expensive. Few people not educated in pending funding understand just how VERY valuable (and hence EXPENSIVE) these differences are. One thing is certain, the Public employee Unions know. That’s why they fight tooth-and-nail to stop changes.

    Here is an accurate comparison of the costs of Public vs Private Sector retirement packages (pension plus retiree healthcare, if any)…. The value (i.e., cost to purchase the pension/benefit package) at the time of retirement of the employer-paid (i.e., Taxpayer) share of the typical (non-safety) worker’s retirement package is 2-4 times that of employer-paid share of the comparable (in pay, years of service, and age at retirement) Private Sector worker, and that multiple increases to 4-6 times for safety workers (policemen, firemen, corrections officers, etc.).

    I’ll bet you had no idea that this HUGE disparity exists. Given that it does, and given that Public Sector “cash” pay by itself is higher, is it surprising that States, cities, towns are being so squeezed to fund this? Not at all.

    So what is the solution? Of course Civil Servants deserve “fair” pay as well as “fair” pensions & benefits, but “fair” should mean COMPARABLE to what their Private Sector Taxpaying counterparts get. Right now, this is anything but true.

    The EXPENSE side of the income statement has been neglected far too long. To reach a “structural balance” we need to reduce current pensions (as well as retiree healthcare subsidies) in the Public Sector to a level comparable to that of the Private Sector. A few more progressive States & Cities (or perhaps, those in the greatest financial pain) know they must look at this and are beginning the baby steps.

    But the BIG problem is the conflict-of-interest conundrum that reducing pensions for CURRENT employees will (in many cases) reduce there own pensions. So, they ONLY propose plan reductions for NEW employees. To be fair, this may be happening not because they just “cave” on addressing such reduction, but because they really believe it is not possible. A disinterested party might look a bit harder. Perhaps we need to get opinions from outside this circle, e.g., from university scholars. Or perhaps challenges should be brought in the Federal Court system where the conflicted parties are no longer the decision-makers.

    Not addressing the huge cost of future accruals for current employees is wishing-away current financial reality. The dire financial problem is here NOW. Reducing pensions ONLY for NEW employees will have little impact for 20-30 years until they begin to retire. We will never make it. But also, given that most (objective) observers agree that current pensions & benefits are overly generous (compared to Private Sector plans … while appropriately taking into account compensation levels), why should we CONTINUE to layer on MORE excessive pension accruals?

    It’s been said that the first step in getting out of a big hole is to STOP DIGGING. Well, every day we allow the current plan to continue, the hole gets deeper.

    Somehow we need to find the way to reduce pensions (not for PAST) but for FUTURE years of service for CURRENT employees. That, along with a significant reduction in the retiree healthcare subsidy just MAY save us.

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