CalPERS still in choppy seas after ‘perfect storm’

Employer satisfaction with CalPERS dropped during the last two years, a new internal survey found, apparently the result of a “perfect storm” of investment losses, scandal, rising rates and other problems.

On a half dozen yes-or-no questions asked in an on-line survey in 2011 and again last month, the average approval rating from CalPERS employers dropped from 74 percent to 61 percent.

The president of the firm that conducted the survey, Peter Michael of Michael Strategic Analysis, told the CalPERS board this month that only 49 percent answering “yes” to the question “Is CalPERS customer service being managed well?” is a red flag.

“This ‘49’ here by employers — that is the single lowest approval rating in any survey for any question ever, all the way back to 1998,” said Michael, who began CalPERS surveys then. “So this really calls out for attention.”

Measuring customer satisfaction with the California Public Employees Retirement System had been limited in the past to active and retired members, now totaling 1.65 million.

Three years ago the CalPERS board approved an expanded look at the system’s “reputation and credibility” after huge investment losses, a pay-to-play scandal and an emerging national debate about whether public pensions are sustainable.

The stakeholder survey added a sample from employers (1,576 state and local government agencies and 1,488 school districts) in 2011. This year the survey began including CalPERS employees.

Another firm, Risk to Reputation, is scheduled to begin conducting in-depth interviews with stakeholders this summer and providing quarterly media analysis. The project is scheduled to continue through 2015.

CalPERS chart shows internal ratings rise and fall with economy

CalPERS chart shows internal ratings rise and fall with economy

Michael said CalPERS has been operating in an unprecedented “perfect storm” since 2009: a deep recession, lagging California economy, several municipal bankruptcies and a public debate over government pensions.

He said CalPERS took necessary steps affecting popularity: raised rates by lowering the earnings forecast and changing actuarial methods, uncovered a bribery-related investment scandal, complied with state furloughs, raised long-term care rates and launched a new computer system.

One of the findings in a part of the survey that asked for a response on a 1-to-10 scale was high approval from employers of raising their annual pension contribution rates during an economic downturn.

“There was overwhelming approval, nines and tens, by all three groups (members, employers and employees),” Michael said. “Even by employers?” a board member asked.

“Yes, they want safety and soundness,” Michael replied.

In a part of the survey where the response to open-ended questions was limited to a few key words CalPERS “weaknesses” dominated this year — customer service, followed by visibility and then politics.

Michael said in the 2011 survey “threats” (public perceptions and “iffy” markets) dominated, an unusual finding in screens of this kind. He said “threats” dropped to third this year and “strengths” (size of membership and investments) were second.

Board member J.J. Jelincic asked for clarification of “politics” as a weakness: “It’s very different if what they are concerned about is politics within the board.”

“It is something different than worrying about politics as the Sacramento Bee thinks it impacts us,” he said. “It’s something again very different if you are talking about the political environment and the whole attacks on defined benefits (pensions).”

Michael said: “I think it is almost exclusively the political environment.” He said there will be a chance to probe “politics” and other key-word findings in the interviews conducted by Risk to Reputation.

Saying he was straying from his usual presentation of findings, Michael offered an “opinion” that the low CalPERS rating on investment performance was the result of a “misperception” of reality.

Michael said that while the CalPERS fund plunged 27 percent during 2008, when the stock market crashed, the Dow Jones average dropped 34 percent. He said CalPERS saved 7 percent, or $15 billion, but five years later people only remember the big losses.

“Do you have low investment performance? No,” Michael told the board. “I think this is to an extent a misconception that you can correct with good communication about investment performance.”

Actually, Wilshire consultants told the board last year that among public pension funds with more than $10 billion in investments CalPERS performance ranked dead last during a five-year period ending Dec. 31, 2011.

The CalPERS diversified investment portfolio of stocks, bonds and other holdings peaked at $260 billion in the fall of 2007, dropped to about $160 billion in March 2009 and was back up to $263 billion last week.

Instead of spinning a favorable message about the losses, CalPERS brought in new investment management led by Joe Dear, reformed its troubled real estate and private equity units and is trying to develop a strategy to reduce the risk of another major loss.

But in a number of ways CalPERS also has responded to the findings in the 2011 survey that low approval ratings in part reflect “misperceptions” and a “communication gap,” lingering shadows from influential events.

CalPERS officials have met with newspaper editorial boards, appeared before a number of state and national groups and held a half dozen training sessions for retirees who volunteer to be “ambassadors” to spread the CalPERS message.

On the Internet, CalPERS responds to issues with a website that includes a series of “Insight” videos, posts annual valuations of 2,044 local retirement plans and webcasts board meetings, averaging about 2,000 viewers depending on the topic.

CalPERS planned to put a database on the Internet listing retirees and their pension amounts, arguing that member data would be “better protected” than on CalPERS retiree databases already posted by the news media and a reform group.

But CalPERS postponed the database earlier this month when three employee groups said they wanted time to propose legislation to limit the amount of retiree information in the database, possibly omitting names.

George Linn of the Retired Public Employees Association of California, who has written articles opposing the database, said the groups plan to meet with CalPERS and want to avoid pushing legislation that would be overturned by the courts.

CalPERS has released the names and pension amounts of retirees when asked, unlike at least seven county retirement systems. Newspapers and First Amendment groups had to file lawsuits to force release of the county pension information.

Terry Francke of Californians Aware, a nonprofit First Amendment watchdog, said in a San Jose Mercury-News op-ed article that in the county suits the courts rejected the argument that elderly retirees would be made more vulnerable to financial predators.

He said any attempt to amend the California Public Records Act to limit pension information would have to demonstrate a need for secrecy to comply with Proposition 59, a constitutional amendment in 2004 that strengthened public records laws.

“These groups do their members no favors in raising their hopes of protection from imagined threats of exploitation when, whether through lawsuits or legislative action, they cannot possibly deliver on those promises,” Francke wrote.

Listening to the objecting stakeholder groups on this issue may have done CalPERS no favor as it works to improve its image.

A lengthy and hard-hitting editorial in the Sacramento Bee, urging lawmakers to protect the state open records law, concluded: “There is no problem here to fix — only one ginned up by CalPERS and the employee groups that control it.”

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 29 Jul 13

66 Responses to “CalPERS still in choppy seas after ‘perfect storm’”

  1. spension Says:

    Well, decades ago when CalPERS moved from bond financing to financing through the volatile stock market, in hope of larger gains, they should have known that huge volatility was the consequence.

    And during bad stock market eras, they’d get a lot of grief from both pensioners and non-pensioned taxpayers.

    It didn’t help that CalPERS pushed the payouts so high as to be unsustainable.

    (queue up the Tough Love and Captain remarks that dirty politicians who are run by the unions are the real problem. But dirty politicians run by the private sector are angels in their view.)

  2. Dr. Mark H. Shapiro Says:

    I suspect that the survey was taken before CalPERS reported its most recent investment results — up 12.5% last fiscal year.

  3. jay Says:

    Why is Michael comparing the PERS portfolio to the Dow Jones Index and concluding PERS outperformed? They’re two different animals. The PERS portfolio is “diversified” while the Dow is all equities.
    PERS has under performed for a decade due to high investment costs and an improper asset allocation.

  4. Tough Love Says:

    Spension, Still trying to speak for me ? Do you think I need YOUR help in expressing my views ?

    And you characterized my views incorrectly. I don’t support the Private Sector shenanigans. The strings pulled by private interests are almost (but not quite ) as bad as the Public Sector Union scum that bribe our elected officials with campaign contributions to do their bidding … meaning the approval of grossly excessive PUBLIC Sector pensions & Benefits.

    An in any event, any games played by Private Sector interests will never justify the Public Sector Union/Politician thievery of Taxpayers wealth.

    The Detroit bankruptcy is just the beginning in a long process of evening that score (the insatiable Public Sector Union Greed).

  5. ReilleyFam Says:

    Why would employees who during their entire employment with the State have their pay listed online compain about having the same info online in retirement?

  6. Dr. Mark H. Shapiro Says:

    @ReilleyFam The primary reason is because elderly pensioners are more vulnerable to ID theft and financial fraud. Don’t forget that a good many of these people are in their late 80’s and 90’s.

  7. spension Says:

    Uh… and the private sector does not bribe public officials as frequently as the public sector unions do? Give me a break.

    Tough Love you rant consistently about the public unions, but never, never about the private sector shenanigans. It is quite noticeable.

    As for working out a solution, the private sector/Wall Street shenanigans are a very good reason to avoid DC plans, where guaranteed fees for those Wall Street interests are guaranteed. Did I mention the new set of scandals in the private annuity business? Another source of good reasons to avoid investment banks and Wall Street consultants. Obviously Vanguard is better.

    As for the $ figure… remember $23.7 trillion for the 2008 bailout for wall street, according to the SIGTARP:

    http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aY0tX8UysIaM

    That kind of money dwarfs the US public pension debt.

    Now I’m for much lower DB benefits. But a well run DB system is the best deal for *EVERYONE*, public workers for taxpayers.

    Arguing for DC is arguing for penury for all but the wall street bankers. I know, I’m in DC plans.

  8. Tough Love Says:

    Spension, As you clearly know … DB Plans simply cannot work in the PUBLIC Sector due to the “Moral Hazard” (i.e., lack of ethics) of our self-serving elected officials.

    Simply stated …they can’t keep themselves from trading favors (thereby betraying the Taxpayers) for Union money.

  9. SeeSaw Says:

    Simply cannot work in the public sector? The first DB system in CA, for teachers, was founded 100 ago. The CalPERS system is now about 85 years old. How’s that for being something in the public sector that “simply cannot work”?

  10. Debbie Says:

    Well said SeeSaw! The pensions work.

  11. Tough Love Says:

    Spension, Well, it depends how you you define “working”. If working means a corrupt system constructed around a you-scratch-my-back-and-I’ll-scratch-yours collusion between the Public Sector Unions and our elected officials, the YES, it is “working”.

    But if a DB pension system with such characteristics and which miserably fails all fairness tests for it’s taxpayers is NOT what you want, then it certainly isn’t “working”.

  12. Tough Love Says:

    Oophs … that was Seesaw, not Spension ……… I wouldn’t have even bothered.

  13. spension Says:

    $23.7 trillion from the taxpayer to Wall Street. According to SIGTARP. That’s the private sector’s influence on politicians.

    Plenty of modest well run public DB systems exist in the US outside of California, Tough Love. I’ve provided links earlier on this board. The unsustainable growth in benefits is not inevitable in public DB systems.

  14. SeeSaw Says:

    Reilly fam–The CalPERS pension database and the Sac Bee state employee database on state employees are not one and the same. Since you are so uninformed, yourself, you really shouldn’t care what happens–one way or another.

  15. SeeSaw Says:

    Atta-way TL. You will never have to try hard to protect your standing on the “insult meter”.

    As far as “well run public DB systems go,” Spension, I predict that I will live my life out in the security of my pension from the largest DB system in the U.S., and so will thousands who will follow, long after I am gone.

  16. Tough Love Says:

    SeeSaw, Your perspective is always that of one of the “takers” … the screwing of the Non-Public Sector Taxpayers to pay for that excess has never been a concern for you.

  17. SeeSaw Says:

    No, TL, your perspective is always on screwing the poor. I have more concern for others in my pinkie, toenail than you have in your whole body.

  18. SeeSaw Says:

    Obama is offering to cut tax rates for the corporations in exchange for spending on job programs for the poor. There is a little back scratching going on there. But I don’t see any mention of union leaders or ;union members in the story, TL. My point is…. back scratching is not limited to unions or the union workers. Union workers are the backbone of the economy in this country!!!

  19. Tough Love Says:

    While PRIVATE Sector Unions were certainly were needed LONG AGO, and to SOME EXTENT are still helpful, PUBLIC Sector Unions are the bane of Private Sector Taxpayers and are a Cancer on Society.

  20. SeeSaw Says:

    Private sector unions have been treated very badly. Again, you are going to have to look to the private sector management to blame there. It sure wasn’t the public sector that froze the blue collar union pensions when the illegals came. NO, it sure wasn’t. Try and find an illegal working in the public sector. And, how many public sector pensioners do you think are shoring up those former private sector workers, now TL? Takers, huh? You have blinders on TL. What big corporation are you working for?

  21. Captain Says:

    “SeeSaw Says: Obama is offering to cut tax rates for the corporations in exchange for spending on job programs for the poor.”

    What does that have to do with bloated public employee pensions? And why do you think that is a bad thing?

  22. Tough Love Says:

    Seesaw=clueless

  23. Captain Says:

    “The president of the firm that conducted the survey, Peter Michael of Michael Strategic Analysis, told the CalPERS board this month that only 49 percent answering “yes” to the question “Is CalPERS customer service being managed well?” is a red flag.

    “This ‘49’ here by employers — that is the single lowest approval rating in any survey for any question ever, all the way back to 1998,” said Michael, who began CalPERS surveys then. “So this really calls out for attention.”

    This comes as little surprise. ” Wilshire consultants told the board last year that among public pension funds with more than $10 billion in investments CalPERS performance ranked dead last during a five-year period ending Dec. 31, 2011.”

    All this despite CalPERS using taxdollars to: “CalPERS officials have met with newspaper editorial boards, appeared before a number of state and national groups and held a half dozen training sessions for retirees who volunteer to be “ambassadors” to spread the CalPERS message.”

    – yet only 49% of employers answered YES to the question is CalPERS being managed well – “So this really calls out for attention.”

    “Board member J.J. Jelincic asked for clarification of “politics” as a weakness: “It’s very different if what they are concerned about is politics within the board.”

    – why is this guy (J.J.) still a board member. Maybe that has something to do with the low approval rating. How many times do you need to be … before CalPERS takes action?

  24. SeeSaw Says:

    TL + Captain = Despicable

  25. SeeSaw Says:

    He is still on the Board because he is serving out a term to which he was elected, and he is a candidate for the position again. He asked a questions about politics, and it is a good question. So other than that, what is your complaint about J.J. Jelencic’s performance as a Board member?

  26. Captain Says:

    SeeSaw, if you want to cut to the core of the problem: CalPERS + Unions + SB400 +Elected officials is what is dispecable. Taxpayers didn’t approve this mess. If all of the above had been honest we wouldn’t be staring at the massive debt that is hanging over every city in this state, and our current taxdollars would be going toward paying for current services – and not to cover expenses of those that have long since been retired – while transferring our generations financial commitments to future generations.

    If we were actually paying for services as they occurred, and I think most of us thought we were prior to reform groups finally shedding light on the troubling topic of pensions and city finances, the compensation levels would be significantly less than they are today because the money to pay employees current compensation levels wouldn’t have existed absent the shennanigans that are deferred costs related to both pensions and retiree healthcare.

    The unions have manipulated everything from deferring costs in order to increase pensions, which increase costs, to hiring the very same council members and City Managers that recommend and and approved the lousy contracts that have been shoved down the taxpayers throats. And CalPERS and their Board Of Administration have everything to do with creating this problem!

  27. SeeSaw Says:

    Captain, do you know how much of your taxes actually goes to pay for pensions? You should probably start there if you are going to make charges that are only words. If the State pays CalPERS 3% of its actual total budget, what smidgen of your state income taxes are in that amount? I pay state income taxes, and I have no idea what portion is used to pay for pensions. This all reminds me of the complainer who was upset about all the taxes he was required to pay to support NASA. A survey was done, and it was determined that every citizen’s liability to NASA, at the time, came out to one-half of one cent/yr. I suspect that your responsibility for pensions would come out in a similar fashion. I am a taxpayer in the same citizen-category as you–there is no line item on my property tax bill or on my state income tax form that designates any specific amount for pensions. If you have a special tax assessment that goes specifically for pensions in your district, I might be able to see your point, if it is obsessive. In the meantime, the representative form of government that we have, is really the best that we are ever going to get. Use your vote.

  28. SeeSaw Says:

    Captain, you and TL, are always so upset about this “back-scratching” between officials and unions. I will say again, as I have been for the last five years: The excessive pensions belong to the former CM’s, Dept. Heads, and middle managers. They got those big pensions by negotiating, individually, with their elected officials, sans unions.. Those managers hate the unions as much as you do. Killing off the unions in CA would turn it into AZ, and the other red places where minimum wage is, “King”.

  29. SeeSaw Says:

    Captain, why must you be reminded that the investment earnings of the CalPERS retirees covers 64 cents of every dollar paid to a pensioner!. Not one penny is coming out of your pocket for the first 8-9 years of every retirees’s pension. After that, the former employer will have to kick in again–it will be pennies on the dollar of your own taxes. The retirees are putting more into the economy than they are taking out of it. Start enjoying your coffee, and smelling the roses.

  30. Tough Love Says:

    Quoting Seesaw … “I will say again, as I have been for the last five years: The excessive pensions belong to the former CM’s, Dept. Heads, and middle managers. ”

    You seem to believe that a pension is excessive ONLY when it is large in “dollars”. That not a proper way to measure “excessive”.

    The (Taxpayer paid-for share of the) TYPICAL Public Sector pension (even for the lowest paid workers) …. is always 2-4 times (4-6 times for safety workers) greater in value at retirement than what their Private Sector counterpart would get if making the SAME pay, having the SAME years of service, and retiring at the SAME Age.

    With EQUAL Public/Private Sector “Total Compensation” (Cash pay plus pensions plus benefits) as an appropriate goal, and with Public Sector workers making no less in “cash pay” than their private sector counterparts, there is ZERO justification for ANY greater pensions or benefits, let alone ones that are multiples greater in value. From this (and the above) it follows that ALL Public Sector pensions are grossly excessive.

    One of the reasons I have called you clueless is because you appear to be unable to comprehend that.

  31. spension Says:

    “The (Taxpayer paid-for share of the) TYPICAL Public Sector pension (even for the lowest paid workers) …. is always 2-4 times (4-6 times for safety workers) greater in value at retirement than what their Private Sector counterpart would get if making the SAME pay, having the SAME years of service, and retiring at the SAME Age.”

    I think you overstate the differences between the *average pensions*. See page 24 of http://www.fixpensionsfirst.com/docs/Full_Report.pdf .

    Private pension value (including DC,DB,SS)… about $470,000
    at age 62 Public… ranges from $590,000 (for CalSTRS) to $840,000 (for Local non-safety).

    So, the public sector pensions are ($590,000/$470,000) = 1.26 higher (CalSTRS) to ($840,000/$470,000) = 1.78 times as greater in value than the private sector, witthe controls you claim.

    Not 2-4 times. Numeracy. It is good for your credibility and public policy.

    Now, I have no idea how to compare public safety workers to private safety workers. I don’t know any private safety workers who are part of SWAT teams, who break into Meth labs and arrest the drug makers, etc. Well, except for Blackwater etc overseas, and they make a whole lot more than local public safety.

    A better comparison is public safety workers in California to other states.

    I think California is definitely high.

    And remember: the high public safety salaries were passed by the California Legislature (including a `yes’ vote by most Republican members).

  32. SeeSaw Says:

    I don’t give one ounce of credence to your apples/oranges comparisons, TL. If you want to live in a Capitalistic society vs. a Socialist society, insisting that all workers in the two sectors be treated as equals, regarding salaries and benefits, is not the way to go. I wish that I had a pension 4-6 times higher than my counterpart in the private sector. If we were all to be even, I would start with wishing I had a comparable salary to my counterpart in the private sector.

  33. SeeSaw Says:

    There is no sense in trying to compare safety workers among the different states–the range of scenarios is too diverse. In fact, it makes no sense to compare safety workers in the different areas of CA.

  34. Tough Love Says:

    Spension, Interesting …… Just a few weeks ago, I put in front of you a complete mathematical “demonstration” (leaving nothing out) of how the Taxpayer paid-for share of a TYPICAL CA Police officer’s pension is 4.5 times greater in value at retirement than that of a Private Sector worker making the SAME pay, having the SAME years of service, and retiring at the SAME Age.

    And you couldn’t find even one single thing wrong with that demonstration …. but you certainly did dance around the issues and complain about excesses in the “Private” Sector … your chosen method of diverting attention from the grossly excessive pensions granted ALL PUBLIC Sector workers.

  35. spension Says:

    Tough Love… I have no idea how to compare a private sector worker’s job, responsibilities, etc with those of a police officer.

    How many private sector workers bust meth labs, Mexican Mafia, etc? Police do jobs we need done and don’t want to do ourselves… although lumberjacks, fishermen, etc have higher fatality rates than police do.

    But I do know that our legislators, city councils, etc, and all other elected officials overwhelmingly vote those benefits to police officers. Governor Walker of Wisconsin also excluded police officers from his removal of collective bargaining rights for police officers. Republicans are strong supporters of high benefits for safety employees.

    As I said, and have always said, 3% @50 is unreasonably high.

    But it is not reasonable to exclusively compare the highest pensioned state employees with an average private sector worker. The `Fix Pensions First’ report worked hard to get an apples-to-apples comparison. And the range of public pensions is 1.26-1.78 times higher in an apples-to-apples comparison.

    `Fix Pensions First’ does compare CHP to FBI, on page 33. $880,000 for CHP, $800,000 to FBI.

  36. spension Says:

    (redundant police offers in Walker sentence. Should read Governor Walker of Wisconsin also excluded police officers from his removal of collective bargaining rights for public unions).

  37. Captain Says:

    “spension Says: Tough Love… I have no idea how to compare a private sector worker’s job, responsibilities, etc with those of a police officer.”

    “spension Says: Tough Love… I have no idea how to compare a private sector worker’s job, responsibilities, etc with those of a police officer.”

    Can you compare a military pension with a police officer pension? The Public safety pensions are ridiculous. I don’t necessarily have a problem with the 3@50 pension formula, but I don’t think the benefit should allow for full retirement. A 2@55 formula should provide adequate compensation. Paying retiree medical should be eliminated. If the employees can’t live on sixty percent of their salary (or more if they work 30 plus years – and they can do that) and pay for their own medical then they can continue to work. Continuing to work for the department, or working another job that they enjoy more, shouldn’t take much effort to cover the difference. Everyone else that pays the freight of these ridiculous retirement plans is probably working toward their social security eligable age.

    Many PD’s have been placing aging officers into office positions while eliminating less paid civilians, to the detriment of budgets. Public Safety unions, especially in California, are nothing more than another special interest group that our favored democrats cater to. They are overpaid, over pensioned, have excessive medical benefits with excessive perks, and more paid leave than just about anyone in the private sector – which leads to excessive overtime compensation/costs. For instance, Vallejo provides up to six weeks of paid vacation, 16.25 paid holidays, and 180 hours of sick leave for their PD. Add it up! Those paid leave days cost the city huge dollars.

  38. Captain Says:

    “I don’t necessarily have a problem with the 3@50 pension formula”

    Correction: I do have a problem with the 3@50 pension formula. I don’ have a problem with the FLAT 2@55 formula minus the retiree medical medical benefits. Let the PD employees either pay for their own medical up to the medicare eligable age or find a job that pays medical. If sixty percent of pay during their retirement doesn’t satisfy their lifestyle then let them get a part time job.

    I don’t want to pay for this nonsense.

  39. Captain Says:

    Spension says: “How many private sector workers bust meth labs, Mexican Mafia, etc? Police do jobs we need done and don’t want to do ourselves… although lumberjacks, fishermen, etc have higher fatality rates than police do.

    But I do know that our legislators, city councils, etc, and all other elected officials overwhelmingly vote those benefits to police officers.”

    Why all the double talk? You continue to claim that the current plan is flawed: ” (spension says) As I said, and have always said, 3% @50 is unreasonably high.”

    – Yes it is!

    Then, Spension, you go on to say: “But it is not reasonable to exclusively compare the highest pensioned state employees with an average private sector worker.”

    – Why not? Are we not talking about California? If we are talking about California then the numbers are clear – public employee unions members are paid significantly more than their private sector counterparts in every city in this state. When discussing toatal compensation, In most cases, the median public “employee compensation” exceeds the “median family income/compensation” in most cities.

    Your argument stinks.

  40. Tough Love Says:

    Quoting Spension …. ” I have no idea how to compare a private sector worker’s job, responsibilities, etc with those of a police officer.”

    Still dodging the point? Is their “cash pay” too low, and not ALREADY reflecting the education, skills, and risks of the job? Few (other than Public Sector workers … who are NEVER “satisfied”) would think so.

    So then what justifies ANY greater pension, let alone ….. AS I DEMONSTRATED … one for which the Taxpayer paid-for share of a TYPICAL CA Police officer’s pension is 4.5 times greater in value at retirement than that of a Private Sector worker making the SAME pay, having the SAME years of service, and retiring at the SAME Age ?
    ———————————————-
    And here the list of the 10 most dangerous jobs … Police didn’t even make the list.
    1. Commercial Fishing
    2. Loggers
    3. Aircraft Pilots and Flight Engineers
    4. Refuse & Recyclable Materials Collectors
    5. Roofers
    6. Structural Iron and Steel Workers
    7. Farmers and Ranchers
    8. Driver/Sales Workers and Truck Drivers.
    9. Electrical Power-Line Installers and Repairers
    10. Taxi Drivers and Chauffeurs
    ————————————————

  41. Captain Says:

    One more thing, Spension. In Vallejo the average “employee” benefits package (which doesn’t include salary or overtime pay)exceeds the “median family income” of Vallejo residents. How does that benefit working families, or the middle class?

    I would like to hear your answer.

  42. Tough Love Says:

    Captain, until I saw your correction, I thought you lost your mind thinking 3%@50 was OK.

    And FYI, 2%@55 is more generous than the richest pensions granted by the largest corporations in AMERICA. There “MIGHT” still be a few granting 2%@60 ONLY if you have 30+ years of service by age 60.

    And very significantly …… the Privater Sector pensions NEVER include annual COLA increases, which increases the value of an otherwise identical Pension w/o COLA by about 1/3 (at the ages Public Sector workers typically retire). Hence, the your suggested 2%@55 WITH COLA is equivalent to 2.67%@55 w/o COLA.

    Next, retiring (and beginning to collect an unreduced pension) at age 55 vs 60 increases the pension’s value by another 10%, so the 2.67@55 becomes equivalent to 2.94@60.

    Captain, my point of this walk-through is that on an apples-to-apples basis even YOUR SUGGESTION of 2%@55 with COLA is just about equivalent to a non-COLA-increased pension of 2.94@60 which is almost 50% large than the richest Corporate pension…… and the current Californian standard Police pension formula of 3%@50 w/COLA is 62% richer than 2%@55 w/COLA, meaning that the 3%@50 w/COLA pension is 2.94×1.62=4.76 times greater in value than the richest Corporate formula of 2%@60 w/o COLA.

    Not surprisingly the 4.76 which I just worked-up above is very close to the 4.55% I developed in a MICH more detailed demonstration posted a few weeks ago.

    If Police pensions are to continue to include Post retirement COLA increases, they should not exceed 1.5%@60. There is no justification for more (on the Taxpayers’ dime), and they should have to save and invest a significant portion of their net periodic pay … just like all Private Sector workers must do.

    Spension is in denial.

  43. spension Says:

    Horseapples. Captain, Tough Love, go talk to the *Republicans* like Gov. Walker in Wisconsin and the Republicans in the California State Legislature… they vote the rich benefits to safety unions, and preserve collective bargaining for safety unions, nearly unanimously.

    The richest Corporate benefits in America? You guys lay on the brown matter thick and stinky… 21 CEOS got payouts that exceeded $100 million a piece

    http://abcnews.go.com/blogs/business/2012/01/golden-parachutes-21-ceos-landed-100m-plus/

    Those are the folks you are fabricating for now. What a joke… their corporate benefits vastly exceed anything in the public sector.

    You’re just shilling now for Wall Street and the bankers now, they pay you to post, Captan and Tough Love.

    BTW, as I say and have always said: 3% at 50 is too high, and the rational route to fixing California pensions is Sovereign Default.

    But I wouldn’t expect you guys to know a number or fact from warm brown material smeared on your noses.

  44. Captain Says:

    “Tough Love Says: Captain, until I saw your correction, I thought you lost your mind thinking 3%@50 was OK.”

    …and as we both know it isn’t only the formula that has created the excessive benefit/problem. CalPERS is a HUGE ISSUE/PROBLEM as they continue to promote false and mis-leading information, or they allow the crooked Board of Administration to dictate the message. Maybe they do that knowing SB400 is their Baby.

    While CalPERS management has made some strides I hope management stands up to the Looney Board, but that is probably difficult as the Board has control over the CEO‘ s job. Google “J.J. Jelincic + censure” and you will see what we’re dealing with. Some people just lack boundaries and integrity. The guy is also the first to complain about any reform efforts, including what others can spend on his Vino. Not the kind of person Taxpayers need overseeing a severely under funded pension plan with a 49% approval rating.

  45. Tough Love Says:

    Spension, Corporatist Shareholders are paying those big Corporate pensions …. NOT Taxpayers …. a BIG difference.

  46. Captain Says:

    spension Says: “You’re just shilling now for Wall Street and the bankers now, they pay you to post, Captan”

    Sure they do. Spension, this blog is called “Calpensions.” It is for the most part about California Public Employee Pensions, which are probably the richest in the country. If you want to start a blog about the crooked activity on Wall Street I’ll be happy to follow and contribute. Until then …

  47. Tough Love Says:

    Spension, So when you cannot effectively respond to reasoned arguments and demonstration, you fall back to the BS that someone must be paying us ….. pathetic.

    NO, at least in my case, due to my training and experience, I fully understand how ridiculously expensive ….. and hence extremely costly …. these pension & benefit promises are.

    There are no effective “solutions” that do not include VERY material Pension & benefit reductions for the FUTURE service of CURRENT workers.

  48. Tough Love Says:

    In my comment just above, “expensive” was supposed to be “generous”.

  49. spension Says:

    Well Tough Love, you were the one that confused DC fees with DB fees a few months ago… all that training and experience hasn’t taught you how to make rational comparisons, or how to use numbers. Completely pathetic.

    And you fall back on repeating pointless comments, like `VERY material Pension…’. Sovereign Default is the only way to in practice achieve any of the goals you set out, but of course, you want to make sure bondholders get no haircut whatsoever, as your corporate masters train you to say.

    Captain, WTF, `corporatist shareholders’? Uh, $23.7 trillion in taxpayer dollars (according to the SIGTARP) went to float the UC corporations during the 2008 bailout. And you bet lots of those taxpayer dollars went straight into golden parachutes for highly paid CEOs.

    A large portion of their parachutes come from no-bid government contracts, legal restrictions that the legislators in corporate pockets write to favor corporations, etc. Puhleeze get your head out of the sand, and see that UC Corporations get trillions in handouts from the taxpayer.

    None of this justifies 3% at 50. But if you guys really make a difference the entire Augean stables must be cleaned out, not just the government side, but the corporate welfare side too.

  50. Tough Love Says:

    Spension, I have never confused DB fees with DB fees …. you are either lying or have a bad memory. Prove it … state exactly where (via link) I did so.

    Then you go back to repeat your sovereign default BS. And again you misstate me. I want BOTH Bondholders and Pensions to reduced by the SAME percentages.

    And FWIW, I not Captain said “Corporatist Shareholders” … which obviously should have been “Corporate Shareholders” (sticky fingers).

    Lastly, quoting Spension … “None of this justifies 3% at 50. But if you guys really make a difference the entire Augean stables must be cleaned out, not just the government side, but the corporate welfare side too.”

    It doesn’t justify 3%@50, or anything even remotely close to that.

    The absolute highest pension granted ANY Public Sector worker (and then only under special and unusual circumstances) should be 1.5%@60, because when you increase it by 1/3 to reflect the included COLA-increase provision (see my mathematical comment above) it is equivalent to a 2%@60 non-COLA pension which is the RICHEST you will find in Corporate America. Public Sector workers NEVER deserve MORE …. and most deserve a lot less (meaning they deserve what is COMMONLY granted Private sector workers).

  51. SeeSaw Says:

    CA has passed its pension reform law–give it a chance! There is no more 3% at 50–so any further discussion of that is irrelevant, where CA is concerned. You are not going to take away anything that has already been earned, according to the laws in affect at the time the, respective, formulas and rules were passed. Every new employee now has a lessor pension to look forward to than the predecesors.. Enough!

  52. Tough Love Says:

    Seesaw, Do you think the readers are stupid ?

    CURRENT Safety workers will CONTINUE to accrue Pension credits at the same (Grossly excessive and completely unaffordable) 3%@50 until they retire … 30+ years from now for some.

  53. SeeSaw Says:

    1.5% at 60 would be worth 30% with a 20 year career; 45% with a 30-year career–probably not enough to even keep the medical premiums going. A mind-recall of past research on retirements is that a retiree must have 60% to 80% of active salary to keep the same lifestyle. I just did grocery shopping tonight. Last month’s 5 small frozen entre’s for $10 is now 5 for $11. They think we won’t notice–we do notice. No TL, you are not going to be allowed to take us back to post-World War II–it is 2013. What Republican House member are you working for? .

  54. spension Says:

    The highest corporate payouts (with taxpayer money, through no-bid contracts, Wall Street Bailouts, and preferential treatment from corporate owned lobbyists and legislatures) exceed $100 million dollars. Never hear Tough Love or Captain complaining about that.

  55. Tough Love Says:

    Seesaw, Like I stated in earlier comments, 1.5%@60 WITH COLA increases is equivalent to 2%@60 W/O COLA increases, which is the richest of Private Sector pensions.

    There is simply ZERO justification for ANY Public Sector workers getting more.

    Just like Private Sector workers must do, Public Sector workers should have to save the balance on their own if they want a higher income replacement ratio in retirement,

    Your failure to understand this shows that you are indeed, clueless.

  56. spension Says:

    Tough Love, the richest Private Sector payouts are these 21 CEOs who got >$100 million each:

    http://abcnews.go.com/blogs/business/2012/01/golden-parachutes-21-ceos-landed-100m-plus/

    on the taxpayer’s dime via the $23.7 trillion taxpayer bailout of Wall Street in 2008, and via legislators owned by the private sector and who do their bidding with no-bid contracts and favorable regulations.

    You better believe Public Sector employees point to the Private Sector excess in their arguments for more.

    Your failure to understand this shows that you are indeed, clueless.

  57. Tough Love Says:

    Spension, Occurrences of government “no-bid contracts, Wall Street Bailouts, and preferential treatment…” are failures of our elected officials and high level government administrators to do their jobs ethically and effectively. Clearly, much of the financial crisis of a few years back was a governmental Regulatory failure. Example: If they had only REQUIRED mortgage lenders to have reasonable “skin in the game” (perhaps by retaining 10%-20% of each mortgage) instead of a fee-generating pass-through, the mortgage crisis would never have happened.

    If such payments contributed to giant pensions,(and I’m sure there were some), clearly that was wrong …… and I would be thrilled if more of the guilty parties (both Corporate and Government) were prosecuted,

    However, a few unjust $100 Million Corporate pensions,(and even 1,000 unjust $10 million pensions) totaling to $10-$15 Billion won’t bankrupt this nation, while an unjust incremental “excess” in pension promises to ALL 25 Million Public Sector workers perhaps averaging $250K-$500K and totaling to at least $5 Trillion (and perhaps $10 Trillion) will indeed bankrupt this nation.

    Think Greece.

  58. Tough Love Says:

    Spension, in an earlier comment (and many times before) you have called for Sovereign Default at the State level.

    I believe you do NOT want the current Defined Benefit System for Public Sector workers reformed, likely because you or a family member benefit from it. I further believe your call for Sovereign Default as the solution to the Pension crisis is simply another of your many attempt at diversion and delay, and accomplishing a State’s Sovereign Default (officially via Bankruptcy, under which pension obligations could be discharge) would likely require a US Constitutional amendment and take a decade or longer.

    That’s just what you want (a LONG delay) so you (or a family member) can continue to accrue over-sized pensions benefits for the remainder of you career(s).

  59. SeeSaw Says:

    Everyone benefits from defined benefit pensions in some way–the ones who are direct beneficiares, their spouses, their children, their childrens’ children, the businesses that put out the products and services the pensioners buy with those DB pensions. You are big-time clueless about the economy, TL! Nobody cares whether or not the public and private sectors are alike, when it comes to salaries and benefits. Everybody wants a job so they can raise their families. Why don’t you get on a soapbox for infrastructure jobs, TL? If you did that, you might actually be taken seriously!

  60. Tough Love Says:

    Seesaw …a stunningly ignorant reply to my earlier comment.

  61. spension Says:

    Yawn, back to your accusations that I somehow benefit from a state pension. Because I call for the only practical and legal way to reduce all California pensions, which is sovereign default. Tough Love, are you for real? I benefit from some mythical state pension because I want to reduce them? Huh? You always trot out that canard when you are cornered, Tough Love.

    I am in DC plans, as I’ve said like 100 times.

    Something like 10 sovereign defaults have happened in US history, Tough Love. I think Florida defaulted twice. There were one or two where bondholders lost everything with no payback whatsoever.

    Let’s see, and now your saying a constitutional amendment is necessary, Tough Love. Huh? If a constitutional amendment was needed, how did the 10 sovereign defaults that *HAVE ALREADY OCCURRED* pass constitutional muster?

    I’m for more modest state pensions. I think the final payouts can be a bit higher than private sector 401(k) plans can sustain because of the lower fees on average in DB plans, and because of the mortality risk reduction. But I think California got off on the wrong foot promising much higher pensions than the contributions could sustain. And California will never catch up, which is why we either will need sovereign default or voluntary reductions of existing pensions and vested pensions.

    Those with low $/service year should get cut the least. I’d be happy if no pensions over $75,000/year after Sovereign Default. Or maybe even limit the post-default pensions to what the PGBC provides.

    There are plenty of well run public DB systems in the US that haven’t had California’s problem. They payout way less than California.

  62. Mr Jennings Says:

    Tlov

    You are hopelessly conflating the costs of dc and db…get real….it’s boring

  63. Tough Love Says:

    Spension…your sounding more and more like clueless Seesaw. The only good suggestion you made is insurance protection (if the insurance is actually paid for via reduced benefits, any insurance payouts are limited to the assets of the insurance entity, and the PBGC caps used in the Private Sector are used).

    By-the-way, you’d be amazed at how low those PBGC Caps are for the young retires age 50-55 at the time of the Plan termination.
    ——————-

    You carefully chose your words …”I am in DC plans”. Ok, but that doesn’t preclude you (or a family member) ALSO being heavily invested in a DB Plan.

  64. Tough Love Says:

    Quoting Mr Jennings …”You are hopelessly conflating the costs of dc and db ….”

    Oh really? Please elaborate.

  65. spension Says:

    WTF… my retirement comes from DC plans as do that of my husband. Back to the charges you hurl when you are at wit’s end,

    Tough Love, clueless? LMFAO. You’re the one who says Sovereign Default requires a constitutional amendment, which is just flat BS… numerous state sovereign defaults have *already occurred* without such an amendment.

  66. Tough Love Says:

    spension…. Still not clear enough. Saying that “my retirement comes from DC plans as do that of my husband”

    Doesn’t mean you (or hubby) doesn’t ALSO have a Public Sector DB Plan. More careful choice of words ?

    And earlier you said ..”Well Tough Love, you were the one that confused DC fees with DB fees a few months ago… all that training and experience hasn’t taught you how to make rational comparisons, or how to use numbers. Completely pathetic.”

    To which I replied …”Spension, I have never confused DB fees with DB fees …. you are either lying or have a bad memory. Prove it … state exactly where (via link) I did so.”

    Short memory (or did you just lie) ? We’re still waiting for that link.

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