Can San Jose cut pensions of current workers?

After a five-day trial last month, a judge is looking at 13 issues in suits filed by unions and retirees against a San Jose pension reform. The big one is whether pensions earned by current workers can be cut.

Measure B, approved by 70 percent of San Jose voters last year, challenges the widely held view that a series of court rulings mean pensions promised state and local government workers on the date of hire become a “vested right” that cannot be cut.

Most attempts to reduce pension costs, including a statewide reform pushed through the Legislature by Gov. Brown last year, spare current workers but give new hires a lower pension, delaying savings for years or decades.

Critics who think under-funded and overly generous public pensions are a runaway train say there is a quicker way to brake growing costs: Give current workers lower pensions for the work they do in the future.

In San Jose, as the city struggled with budget deficits totaling $670 million during the last decade, retirement costs ballooned from $73 million to $245 million, the court was told. The number of sworn police dropped 21 percent, firefighters 11 percent.

Retirement costs now eat up about 20 percent of the city general fund, diverting money from other programs. Actuaries for the city’s two independent retirement systems are continuing to project big cost increases.

“These costs will exceed 25 percent of the general fund by 2017-18,” Mayor Chuck Reed said in his June budget message, “unless we implement the additional employee contributions and lower-cost pension option for our current employees, and get all new employees into the Tier II plan, as approved in Measure B.”

This year the city contributes 57.7 percent of pay for police and fire pensions and retiree health care, while the employees contribute 11.16 percent of pay, the court was told. Next year the city is projected to contribute 70.55 percent, employees 11.67 percent.

(In comparison, the state contributes 35.9 percent of pay for Highway Patrol pensions this fiscal year and employees 11.5 percent under rates set by the California Public Employees Retirement System.)

San Jose

Pension critics think San Jose, located in wealthy Silicon Valley, is where the future arrived first unless the rigid California retirement systems are given some flexibility to control costs.

The watchdog Little Hoover Commission’s top recommendation in 2011 after a study of public pensions: “The Legislature should give state and local governments the authority to alter the future, unaccrued retirement benefits for current public employees.”

Private-sector pension funds in the United States can give current workers lower pensions for future service. In the Netherlands, retiree pensions were cut this year to help meet an unusual requirement that pension funding levels remain safely high, 105 percent.

A pension reform approved by 66 percent of San Diego voters last year sought immediate savings by directing the city to freeze pay used to calculate pensions for five years.

The city negotiated a five-year freeze on pensionable pay that was expected to cut city pension costs by more than $108 million. But the board of the city’s independent pension funds failed to recalculate the first-year bill, eliminating $20 million in savings.

“This is an important turning point for the city,” Mayor Bob Filner, now battling sexual harassment allegations, said in a news release in June when the city council approved the labor contracts.

The San Diego pension reform, Proposition B, also gives all new city hires, except police, a 401(k)-style individual investment plan instead of a pension, following the private-sector trend that switches risk from the employer to the employee.

The San Jose pension reform is expected to save about $20 million this year, mainly from eliminating a bonus “13th check” to retirees when investment earnings exceed projections and a switch to a lower cost retiree health plan.

Bigger savings would come from giving current workers an option: choose to earn a lower pension for future service, or contribute up to an additional 16 percent of pay to continue earning the previous pension amount.

Would court approval of the option have any impact on the “vested rights” of current workers in other retirement systems? The city’s main argument is based on an unusual, if not unique, voter-approved amendment to the San Jose charter in 1961.

A key city charter phrase highlighted in an opening-day presentation to the court: “The Council in its discretion may at any time, or from time to time by ordinance, amend or otherwise change the retirement plan established by said Section 78a.”

If the courts deny the option, the measure authorizes the city to make a 16 percent reduction in pay, a San Diego-style pension cut that goes well beyond a freeze in the pay used to calculate pensions.

As the five-day trial concluded on July 26, Santa Clara County Superior Court Judge Patricia Lucas set dates for follow-up action: Sept. 10 and Oct. 10. Her decisions on the Measure B issues are likely to be appealed.

The San Jose and San Diego pension reforms also are being contested by the state Public Employment Relations Board. Unions contend that state bargaining laws were bypassed before the public vote.

Another hurdle for the San Jose option is the need for approval from the U.S. Internal Revenue Service. Under a ruling in 2006, the IRS could deny tax-deferred status if an individual chooses a retirement plan with a lower benefit.

Mayor Reed said the option issue has been placed on the IRS “work schedule” for decisions. Orange County has been unsuccessfully seeking IRS approval of an option plan for current workers negotiated with employees in 2009.

U.S. Rep. Loretta Sanchez, D-Santa Ana, introduced legislation two years ago to give tax-deferred status to optional retirement plans with lower benefits. Her bill expired at the end of the last session without a hearing.

At a legislative hearing last year, former Orange County Supervisor Bill Campbell said a quarter of the county’s new hires had chosen the option with a lower pension and lower employee contributions, reducing the bite from their paychecks.

The Little Hoover report in 2011 said state workers were given the option of a lower pension with no employee contribution three decades ago. CalPERS found that 47 percent of new hires from 1984 to 1988 chose the lower pension.

Last June, Reed and Santa Ana Mayor Miguel Pulido said in a U-T San Diego opinion article that the state constitution should be amended to give state and local governments clear authority to cut pensions current workers earn for future service.

“Such an amendment would not take away benefits that employees have earned for prior years of service,” the mayors wrote. “However, it would allow government agencies to prospectively adjust benefit formulas, employee contributions, retirement ages and cost-of-living increases — either through collective bargaining process or by voter approval.”

Reed has talked to legislators about placing a constitutional amendment on the ballot, regarded as unlikely due to union opposition, and to other leaders about placing an amendment on the ballot through an initiative, the San Jose Mercury-News reported last month.

Reporter Ed Mendel covered the Capitol in Sacramento for nearly three decades, most recently for the San Diego Union-Tribune. More stories are at Calpensions.com. Posted 5 Aug 13.

72 Responses to “Can San Jose cut pensions of current workers?”

  1. Tough Love Says:

    Quoting … “Critics who think under-funded and overly generous public pensions are a runaway train say there is a quicker way to brake growing costs: Give current workers lower pensions for the work they do in the future.”

    There are NO MATERIAL SOLUTIONS that do not include the above change.

    Additionally, the RICHEST formula of the largest Private Sector Corporate pensions (of the very few that even still provide these traditional Final-Average-Salary Defined Benefit Pension Plans) is 2%@60 with NO COLA adjustment.(and then ONLY if you have 30 years of service).

    Public Sector pensions should NEVER exceed that level.

    And, since Public Sector Plans DO include COLA increases (and adding the COLA feature increases a Plans value by 1/3 from an otherwise identical Plan w/o COLA), a Public Sector 1.5%@60 Plan WITH COLA is equivalent to the richest 2%@60 w/o COLA Corporate Plan.

    The Pensions not promised ALL Public Sector workers …even those with the LOWEST formula Plans …. exceed the RICHEST Corporate Plans. This is completely absurd and an unjust Taxpayer ripoff.

    The ridiculous 3%@50 Pension granted almost all CA Safety workers is 4-5 TIMES greater in value than the RICHEST Corporate Sector Plan.

    When does this absurdity and Taxpayer Ripoff end ?

  2. Tough Love Says:

    Correction: The word “not” in the 3-rd from last sentence in my earlier comment should be removed.

  3. EJ Says:

    @Tough Love – not true. The richest pensions are in the private sector. Example: J Mulva, CEO of a well-known oil company, who retired last year with a pension of $66 million as part of a $260 million golden parachute package. Public pensions pale in comparison to lavish executive comps at big multinational companies, some of whom get tax subsidies…

  4. Sully Says:

    EJ, the golden parachute is not part of the corporate pension program. It’s a negotiated package given to the CEO. Although I agree it’s excessive, it doesn’t affect public services. The recent pensions “promised” public employees IS excessive and directly affects public services.

    Any public employee that wants to live a life style of the rich and famous should switch to the private sector. Public funds should not be used for that purpose.

  5. SeeSaw Says:

    As the world turns–TL continues his crusade to make the U.S. a third-word country. Everybody except the corporate CEO’s will be poor.

  6. caliphornian Says:

    Well, Tough Love? Stop posting here and get the Constitutional amendment placed on the ballot. Then your “absurdity” may end. At least you’ll know where the voters stand.

  7. SeeSaw Says:

    Correction: third-world country.

  8. SeeSaw Says:

    The only thing wrong with your assumption Sully is: It is a lie! Public employees do not lead “Rich and Famous” lives! If you expect public employees to be volunteers, then go be one–the rest of us need to pay our bills.

  9. Tough Love Says:

    Here’s the mindset from a comment by Seesaw yesterday….

    “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. ”

    Sure Seesaw, perhaps PRIVATE Sector Taxpayers will benefit from the “trickle down” effect of PUBLIC Sector retiree spending.

    Clueless !

  10. Al Moncrief Says:

    SAN JOSE’S PUBLIC PENSION COLA-THEFT.

    “The legal views of (San Jose Mayor Chuck) Reed, a Stanford law school graduate and long-time attorney, were questioned by one of the five council members opposed to the plan, Ash Kalra, a Lincoln Law School professor who worked in the county public defender’s office.”

    “‘It was already a horrible case legally,’ Kalra said. ‘We really don’t have cases to back up our legal position, and now we don’t even have the fiscal emergency argument.’”

    “He said a memo indicates the ‘reservation of rights clause, which you know is legally a very weak clause and is unlikely to withstand any challenge, is being held up as how we can go forward without impairment of contract. We know that’s not true.’”

    “The nonpartisan Legislative Analyst is among those who think a series of court rulings generally mean that a pension promised a state or local government worker on the date of hire becomes a vested right, protected by contract law.”

    https://calpensions.com/2011/12/08/pension-reform-does-san-jose-know-the-way/

    Mayor Reed: “So we have to be able to modify those future accruals to bring the cost of the benefits down.”

    http://www.citywatchla.com/8br-hidden/5436-sj-mayor-chuck-reed-fix-pensions-fix-california

    (FYI, Mr. Mayor, taking an accrued, fully-vested, earned public pension COLA benefit IS NOT modifying a future accrual.)

    Legal Update on San Jose and San Diego Ballot Measures, Saltzman and Johnson, August 28, 2012:

    “As to current retirees, their COLAs could be suspended for up to five years in the event the City Council declared a “fiscal and service level emergency.”

    Support public pension contractual rights in the USA. Contribute at saveperacola.com. “Friend” Save Pera Cola!

  11. EJ Says:

    @Sully — The oil exec’s golden parachute, according to the financial news report, included $66 mil in corp pension — their words exactly. And yes those oil baron parachutes DO affect the public — you and I both pay a hidden CEO pension/compensation “tax” every time we fill up at the pump.

  12. Tough Love Says:

    Once the US Bankruptcy Court affirms a Detroit reduction in not only FUTURE service pension accruals, but reductions for PAST service accruals as well, the floodgates of bankruptcy filings and MUCH MUCH tougher gov’t negotiating will come to the fore.

    It about time ….a well-deserved comeuppance for the VERY GREEDY Public Sector Union/workers.

    At least half (2/3 for safety workers) of these grossly excessive and unjust Public Sector pension promises should be disavowed by Private Sector Taxpayers.

  13. Tough Love Says:

    EJ, Read my FIRST comment (at the top). THAT’s the correct comparison … not your attempt at distraction from the gross excesses in ALL Public Sector Pensions by pointing to the few (but agreed) ridiculously absurd pensions granted certain CEO’s.

  14. Tough Love Says:

    After Japanese planes bombed Pearl Harbor on Dec. 7, 1941, the man who planned and commanded the attack, Admiral Isoruku Yamamoto, having private fears about what he had done, said …… “I’m afraid we have awakened a sleeping giant and filled it with terrible resolve,”

    Well guess what ?

    Private Sector Taxpayers have “awakened” to the enormous Public Sector Pension & Benefit Taxpayer ripoff, and we (the Taxpayers) will muster whatever resolve is necessary to right that wrong, and very significantly reduce these grossly excessive promises.

  15. SeeSaw Says:

    Face the facts TL–all you have are opinions. The fact is: The average CalPERS pension for almost 500,000 annuitants is about $25,000 yr. Even the egregious ones that go to the former non-union managers pale in comparison to the pensions of private-sector CEO’s.

  16. Robert T Says:

    We love Tough Love

  17. Robert T Says:

    No public pension in excess of $40,000 per year – PERIOD. Illinois just announced its first $500,000 per year pension. Again, no public pension in excess of $40,000 per year. It’s called “welcome to the middle class”. Do the math, even “modest pensions are worth millions over their lifetime, esp give early retirements these public employees have voted for themselves.

  18. Sully Says:

    SeeSaw, what are you – a union rep or rank and file?

  19. Tough Love Says:

    Robert T., Just FYI……

    The “value” in current lump sum terms of a single life immediate annuity (i.e., a “pension”) to a 55 year old new retiree (using a Unisex mortality table) is about 20 times the annual payout if
    that annuity includes COLA increases (as almost all PUBLIC but NOT PRIVATE Sector Plans do) or 15 times w/o COLA increases.

  20. Captain Says:

    I love Tough Love also. To date, nobody has effectively challenged his/her numbers. Just one bad argument after another followed by false claims and ridiculous calls for Sovereign Default.

    Ignore Seesaw. He/she contributes nothing other than the false claims that taxpayers have nothing to worry about, Calpers pensioners only receive 25K per year, and any “extra” money they may receive ( I guess this person is talking about the six figure pensioners) will benefit taxpayers when they (pensioners) spend that money which will boost the economy, thereby doing taxpayers a big favor.

  21. Captain Says:

    “The San Jose pension reform is expected to save about $20 million this year, mainly from eliminating a bonus “13th check” to retirees when investment earnings exceed projections”.

    This issue isn’t only happening in San Jose but also with many other cities that manage their own pension fund, as well as many (if not all) County plans. In the case of SJ, employees get (or got) their 13th pension check every year the investments earnings were greater 7.75%. If investments earnings exceeded the target rate of return then a large percentage of what were termed “excess earnings” were divided between the pension plan and the employees – the 13th check! It didn’t matter if the pension plan was only 65% funded – the employees took their cut as a BONUS.

    This action should be illegal! The odds of the pension fund ever being 100%, absent increased taxpayer funding, is virtually nil when the target rate of return is absurdly high and the employees are skimming from every up-year while ignoring the down years and the precarious position of their pension plans.

    They aren’t just taking money when the plan is over 100% funded. The 13th check was paid while some of the plans were less than 60% funded. If that isn’t criminal I don’t know what is.

    While the SJ Safety Unions were busy claiming they put a proposal before the city that would save 500 million over 10 years, what they were really doing was proposing a plan to switch to CalPERS. The reason they made the proposal was to use the lie and the media to pressure the Mayor and Council to succumb to their demands.

    In reality switching from the San Jose pension plan to CalPERS allowed the unions to defer debt further into the future. CalPERS, as an outlier when it comes to debt deferral, would have allowed the SJ pension plan (with more conservative rules and regulations – like most plans not CalPERS), to push more of their unfunded liabilities into future years and decades. 90 percent of what the SJ unions were claiming as savings were really only smaller payments because of elongated payment terms, which lowered payments while increasing debt/total cost substantially.

    San Jose also provides 3% COLA’s to many of their employees.

    Did I mention the SJ pension plan allowed employees to skim excess (?) earnings from the pension plan while the pension plan was tanking? Isn’t that kind of like stealing money from the taxpayers? And the unions had the nerve to ask for increased taxes.

  22. Captain Says:

    “The San Jose pension reform is expected to save about $20 million this year, mainly from eliminating a bonus “13th check” to retirees”.

    … can’t help but wonder how many decades this has been going on and how many 100’s of millions, that could have been earning money at the discount rate, this is costing San Jose City taxpayers. I wonder if the “13th check” recipients would be willing to repay those dollars. Naw, their to busy suing SJ to force the city taxpayers to cover the unfunded liability plus all the money they basically stole from the very same citizens that have provided them with Jobs and lucrative pensions. For some enough is never enough.

    For me, I say enough already.

  23. SeeSaw Says:

    Really Captain! I am the only one of you that has been there, (retired, rank and file–miscellaneous.) and can tell the ones like you and TL that you are all liars. You spout only opinions. The facts regarding the CalPERS annuitants speak for themselves. We all dump plenty into the economy.

  24. SeeSaw Says:

    Its a wonder you even have time to earn a living for yourself, Captain, since you spend all your time minding the business of the public employees.

  25. Tough Love Says:

    Seesaw, Please tell me specifically about the “lies” you claim I have made.

  26. Captain Says:

    SeeSaw Says: “Really Captain! I am the only one of you that has been there, (retired, rank and file–miscellaneous.) and can tell the ones like you and TL that you are all liars. You spout only opinions. The facts regarding the CalPERS annuitants speak for themselves. We all dump plenty into the economy.”

    And what do you think about the “13th check”? Nevermind, I’ll just let your naive statement speak for itself.

  27. SeeSaw Says:

    Everything you say is opinion–not fact. So everything you say is a lie.

  28. Tough Love Says:

    Seesaw, Of course you (and all Public Sector workers) “dump plenty into the economy” …. from these grossly excessive pensions, only 10-20% funded by your own contributions (INCLUDING all the investment earnings thereon).

    Would it be any less beneficial to the the economy if HALF of your (and all other Public Sector workers) excessive pensions were not granted and the funds not taken from the Taxpayers (to fund the 80-90% balance of your pension), and remained in the Taxpayers’ pockets for THEM to spend in that same economy ?

  29. SeeSaw Says:

    I don’t know anything about the 13th check and have no opinion on it.

  30. Mary Flaig, Pacific Grove Says:

    From 2008:

    Companies Tap Pension Plans to Pay Exec Benefits
    https://www.propublica.org/article/companies-tap-pension-plans-to-pay-exec-benefits-804

    Unfortunately, American employees appear to have been sitting ducks for years, unwitting tools of their own ripoff. Ellen E. Schulz of the WSJ outlines the painful, thoroughly researched facts in Retirement Heist. There’s a web site. Read it and weep.

  31. SeeSaw Says:

    Well, Mary, one good thing about the public pension plans like CalPERS is that the execs cannot up their own formulas without including the lowlies. My CM got 3% in 2001, and I got 3%. His current retirement check is six+ times more than mine–but I came out a lot better than my spouse whose blue-collar DB pension was frozen, in place, in 2006.

    My spouse’s pension check doesn’t even cover the medical insurance premium. That is where TL and Captain would like to put all of the public sector workers who expect sustainable retirements!

    TL and Captain are picking on the wrong people–the villains all along have been the execs in the private sector. TL and Captain are the sitting ducks!

  32. SeeSaw Says:

    Correction: My spouse’s blue collar, DB pension was frozen, in place, in 1986.

  33. Mary Flaig, Pacific Grove Says:

    Re: economic benefits of DB pensions:

    Pensionomics 2012: Measuring the Economic Impact of DB Pension Expenditures

    http://www.nirsonline.org/index.php?option=com_content&task=view&id=684&Itemid=48

  34. Tough Love Says:

    Quoting Seesaw ….”My spouse’s pension check doesn’t even cover the medical insurance premium. That is where TL and Captain would like to put all of the public sector workers who expect sustainable retirements!”

    No, where I want Public Sector workers/retirees is on an EQUAL footing with comparable Private Sector workers/retirees.

    Your spouse’s pension isn’t atypical, YOURs is… clearly the result of Public Sector Union/Politician collusion.

  35. SeeSaw Says:

    There goes another lie!

    Clearly, TL, you want everyone to be what you consider typical–destitute!

  36. Tough Love Says:

    SeeSaw, What you refuse to accept is that the American economy cannot AFFORD to provide everyone (BOTH Public and Private Sector workers) with the very high level of pensions Public Sector workers have managed to extract from Taxpayers.

    But as long as “you’ve got yours”, that’s all that REALLY matters to you, even though repeatedly profess otherwise.

    A full (35+ year) career pension (with NO COLAs and with unreduced payout starting at no earlier than age 62 … perhaps age 60 for safety workers) should NEVER exceed 50% of the average of last 5 year’s BASE PAY. If you want a higher income replacement in retirement it should be the result of personal saving & investing.

    And that rule should equally apply to both Public and Private Sector workers.

    You see Seesaw, I’m not the greedy one looking to keep or gain an advantage, you are.

    There will be a great many more “Detroits” as reality and the Math sets in.

  37. Berryessa Chillin' Says:

    I’m a San Jose resident and the “13th check” leaves me flabbergasted. I feel sick. This city is becoming a crime cesspool with the huge amounts diverted to cover pensions and this crap happens?

  38. SeeSaw Says:

    I was 72 when I filed for my pension and it is modest at that. No, you aren’t greedy, TL–you are sick, sick, sick!

  39. SeeSaw Says:

    Well, I do have a higher amount in my income than just my DB pension, TL. It is the result of personal saving, also–bet that frosts you so much you just can’t stand it can you? You are petty and disgusting!

  40. Tough Love Says:

    Seesaw, Re-read my last comment … a few times. Then think about it.

  41. Captain Says:

    “SeeSaw Says: I don’t know anything about the 13th check and have no opinion on it.”

    Why not? I explained how the “13th check” has negatively impacted both the the pension plans funding level and, therefore, the taxpayers. The San Jose plan may not be a CalPERS plan but surely you can understand how taxpayers would be furious?

    I’ll call the “13th Check” that the San Jose Unions receive as something comprable to what CalPERS has allowed, and even promoted: Enhanced pension formulas, retroactive pension benefits, highest 12 months compensation applys toward pension, educational pay counts toward pensionable income, Holiday pay cashed-out counts toward increased compensation & pensionable income, accrued sick leave applied toward the pension counts toward increased compensation in the pension calculation, employer pick-up of the employee contribution (the city pays the employee share of the pension contribution) counts toward increasing the pension payout, etc… etc…

    While the “13th Check” is criminal so are all the BS perks that employees receive which add-ons to their pension payouts. Those perks and add-ons wouldn’t exist if the CORRUPT CalPERS hadn’t added them to their plan – as an option. CalPERS has went out of their way to screw the progam they were supposed to be administering. I blame much of that on the corrupt Board of Administration and our Failed Democratic politicians that have become the “Yes Men/Women” for the unions.

    What do you think Seesaw?

  42. Captain Says:

    “Berryessa Chillin’ Says: I’m a San Jose resident and the “13th check” leaves me flabbergasted. I feel sick. This city is becoming a crime cesspool with the huge amounts diverted to cover pensions and this crap happens?”

    The “13th Check” is so outrageous I wouldn’t know where to begin other than to say say it has cost taxpayers 100’s of millions of dollars – that have yet to be paid.

    Mayor Chuck Reed is working hard while enduring the constant attack from the unions. Support your Mayor because he is working hard to protect the taxpayers.

  43. SeeSaw Says:

    Why are you blaming CalPERS for all that spiking you are listing here when it stopped allowing things like that in 1993! The pension is calculated on base salary only. When I retired, there was the option to convert half of my unused sick leave to service credit–not salary–in my case it would have added another six months. Keep in mind that CalPers did not set up all these pension formulas and plans, over the 80+ years of its existence. All emanates from legislation passed by the state. Union membership, or not, is irrelevant to the administration of CalPERS.

    I personally oppose pension spiking by throwing in everything but the kitchen sink–which is what the 37 Act County Plans do. I don’t know if the county plans are covered by the new state reform law or not. I hope so. I don’t spend my time vetting pension plans all over the State.

    During my active tenure as a public employee, I paid 7% of my gross salary toward my pension, for the first few years. That was eventually picked up by my employer. We had a CB process for things like that–and there were no unions involved at the time. We decided to join an “association” along the way, because it was more convenient to have a representative act for us. Our dues were never as much as $15/mo. and I never saw any of the so-called threats and bribes that you talk about. There was nothing criminal about the employer picking up the pension share–it was simply offered in place of a COLA and was cheaper for the employer in the long run. Unfortunately, the employees at my former entity are now paying their own full share–something that all the State’s public employees must be doing by 2018.

    I have yet to hear from you and others, just what you are paying from your taxes for pensions. I am a taxpayer just like any other CA citizen and I think my personal property and state income taxes are quite reasonable. I doubt they would be any less, if the pensions did not exist. I do believe that if it weren’t for people having pensions, the economy would be far worse and all of the studies you see regarding pensions detail the very positive effects that pensions have on the economy. Those are facts–not opinions like you and your cohorts spout.

    All I can say is that there has been a pension reform act passed. It covers new employees only. There is a cap now on pensionable income and new formulas that will require workers to work longer for less, therefore keeping the door shut longer for younger workers wanting to step into the public sector. We do not live in a perfect world, but our section of this planet is preferable to any other, in my view.

    I still have no way to judge the 13th check one way or the other, because it is not my pension plan and I do not have all the facts. It may be something that was bargained in place of salary increases, just like my pension pickup.

    As for retroactive enhancements–you got your way–it was abolished in the new pension reform. Such policies have been the way it was done for all the years of the existence of the DB plans and it was certainly no brainchild of CalPERS.

  44. Tough Love Says:

    Quoting Seesaw… “When I retired, there was the option to convert half of my unused sick leave to service credit–not salary–in my case it would have added another six months. ”

    And why is doing so appropriate (with the resultant increase in pensions) … when Taxpayers (NOT the workers) pay for 80-90% of total Plan costs and I don’t believe you could find a single Private Sector Plans that allows this?
    ______________________________

    Quoting …. “never saw any of the so-called threats and bribes that you talk about. There was nothing criminal about the employer picking up the pension share–it was simply offered in place of a COLA and was cheaper for the employer in the long run. ”

    Interesting logic … it was “cheaper” than something else (the COLA) that in itself is not justified, again because Private Sector Taxpayer pensions almost NEVER include COLA-increases while they pay for 80-90% of total Public Sector pension costs.

    Similar to the unjust circus of one City ONLY comparing their pay, pensions, and benefits to other OVERPAID Public Sector workers in other cities, but never to that of comparable PRIVATE Sector workers.
    ————————————-
    And quoting …”I do believe that if it weren’t for people having pensions, the economy would be far worse and all of the studies you see regarding pensions detail the very positive effects that pensions have on the economy.”

    Boloney …see my earlier comment on this above.
    ———————————————————–
    Quoting …”I still have no way to judge the 13th check one way or the other, because it is not my pension plan and I do not have all the facts. It may be something that was bargained in place of salary increases, just like my pension pickup. ”

    Bargained for “in place of salary increases”….. Just wonder if any agreement to pay that 13-th check actually demonstrated LESSER pay than their Private Sector counterparts, thereby justifying that 13-th check. I’ll bet dollars-to-donuts there wasn’t. Just another element of the taxpayer ripoff and betrayal.by elected officials.
    ————————
    Quoting …”As for retroactive enhancements–you got your way–it was abolished in the new pension reform.”

    No we didn’t ….. retroactive increase were nothing but a theft of taxpayer wealth (with ZERO incremental services provided as “consideration” for those increases). What Taxpayers deserve is to have all retroactive increase reversed….. WITH a return of already paid-out increased amounts.

  45. SeeSaw Says:

    Speak for yourself TL–attack the pension plan in your own state, if you want. This is California–it is not Detroit, and it will never be Detroit. The people of CA will be the ones to decide what will happen on issues of pension reform. You can utter the word, “Should” until your dying day if you want–“Should”, accomplishes nothing. Collaboration combined with legislation is the only action that does that.

  46. Tough Love Says:

    Seesaw, Do you see much “:collaboration” from Detroit’s financial manager Mr. Orr with their Public Sector Unions? It will ultimately be a shove-it-down-their-throats pension reduction scenario (with the Bankruptcy Court’s approval), because that’s the ONLY way to deal with the insatiable greed of Public Sector Unions/workers.

    Detroit today ….. coming to Crazyfornia very soon

  47. SeeSaw Says:

    I hope you have your own home blood pressure monitor, TL–because you sure need it.

  48. Tough Love Says:

    Seesaw, Do you see much “:collaboration” from Detroit’s financial manager Mr. Orr with their Public Sector Unions? It will ultimately be a shove-it-down-their-throats pension reduction scenario (with the Bankruptcy Court’s approval), because that’s the ONLY way to deal with the insatiable greed of Public Sector Unions/workers.

    Detroit today ….. coming to Crazyfornia very soon

  49. SeeSaw Says:

    Yes, there will be collaboration in one way or another, and I predict that none of the things you say, “should” happen will happen.

  50. Tough Love Says:

    Seesaw, You may be right, because once the CA Unions see (from the Detroit bankruptcy) that pensions CAN and WILL be cut, perhaps they will get serious about negotiating the very-much-needed-and-justifiable pension reductions for the future service of current workers.

    Because half-a-loaf is better than no loaf at all.

  51. SeeSaw Says:

    That already happened in San Jose and San Diego. There is litigation going on in court right now. The unions will be looking at those cases–this is CA–not Detroit, and the laws could be different in each state. My loyalty will always be to the public workers. I hope they kick the butts of both SJ and SD in those court cases!

  52. Tough Love Says:

    Quoting SeeSaw …”My loyalty will always be to the public workers. I hope they kick the butts of both SJ and SD in those court cases!”

    Surprise surprise …..

    You got a lot of spunk for a 74 year old retired lady….
    I wouldn’t be surprised if the SJ & SD Unions win in the CA courts, since the judges are biased and obviously have a conflict of interest (not wanting to open a door to changes in there own pensions)

    The game changes radically in Federal Bankruptcy Court …. where the Unions will not only lose, but likely be ignored.

  53. SeeSaw Says:

    No, you are wrong, TL. In Chapter 9 the Ctiy going bankrupt decides how to handle the pensions–I don’t see foresee that either Stockton or San Bernardino will be throwing out the pensions.

  54. Tough Love Says:

    SeeSaw, Conceptually, the City decides, but as Judge Klein has already stated in the Stockton Bankruptcy … he won’t be very receptive to only the bondholders taking a big hit.

  55. SeeSaw Says:

    The bondholders are insured. It doesn’t matter how receptive or not he will feel–he has to go by what the law says.

  56. Tough Love Says:

    SeeSaw, Yes he does, but the law says HE determines if the Exit Plan if fair to all creditors (which includes those owed pensions). While he can’t “force” specific changes, he can refuse to accept the Bankruptcy Plan and the city cannot exit Bankruptcy…… not a situation in which a City wants to remain.

    As to the Bonds being “insured” ….completely irrelevant from the legal perspective.

  57. Captain Says:

    Tough Love Says: “Quoting SeeSaw …”My loyalty will always be to the public workers. I hope they kick the butts of both SJ and SD in those court cases!”

    Surprise surprise …..

    You got a lot of spunk for a 74 year old retired lady….””

    Seesaw is nothing more than a charachter created by the CalPERS Ambassoder club. He is either Dave Lowe, or a desciple of Dave Lowe; the “chairman of Californians for Retirement Security, a coalition representing 1.5 million public employees and retirees.”

    Read more here from Dave Lowe (Lies, half truths, and more lies): http://www.sacbee.com/2013/08/09/5635960/states-approach-to-pensions-doesnt.html#disqus_thread

    Some comments from people that read the article:

    1) “Paris_HiltonCollapse

    It’s funny. I was reading an article about Detroit pensions and they sounded very reasonable. A 25 year firefighter was getting something like $35k per year on a disability retirement (he retired in his 40’s).

    It sounded like a totally fair system. That same firefighter if he/she worked for Metro Fire in Sacramento would be getting a pension of about $90k a year.

    The only reason our pension system is still solvent is that taxpayers are shoveling in billions of dollars of contributions every year. The issue isn’t so much solvency, but cost. Pensions for safety employees now cost over 40% of payroll. Most employees contribute 10% of payroll or 25% of the cost of the pension. The taxpayers pick up the other 75%. This system is totally unfair and overly generous.

    It amounts to a huge transfer of wealth from the private sector to government employees for no valid economic reason. The only reason it is occurring is that government unions have extraordinary power over Democratic lawmakers in California.”

    2) “spectre13Collapse

    Dave Low (and yesterday’s front-page cover boy Steve Maviglio) both speak for Californians for Retirement Security, an organization created by and for unions when the talk of pension reform actually sent chills up and down the spines of those union hacks who might actually have one.

    They, along with their usual supporters in the legislature (think Darrell Steinberg), succeeded in declawing Gov. Brown’s multipoint wish list for real pension reform by turning it into a kabuki dance that succeeded in plucking the low-hanging fruit from the pension tree.

    At least it closed some of the costly perks available to public employees but it still leaves in place the defined benefit infrastructure, backed up by the taxpayers, when investments fail to deliver the lofty returns their promoters tout.

    Low and Maviglio always bring that emotional aspect to any talk of pension reform: “Californians overwhelmingly support the pensions earned by teachers” but then they attempt to extend that support to two of the most egregious pension benefit employee groups in the state–cops and firefighters.

    Teachers deserve everything they get. Cops and firefighters, too, deserve a decent salary and retirement which they have enjoyed ever since their job classification was elevated among all others. But cops and firefighters–even after the so-called pension reform–are still able to achieve a pretty rich retirement income after a career.

    Which is why opinion pieces like this one from Dave Low, and similar ones from Steve Maviglio (when he’s not overtly spinning for Speaker Perez) will continue to reach these pages–because they still fear that real pension reform could yet again become an issue.”

    Names to remember:

    Darrell Steinberg – our wannabe next governor is completely beholden to the unions. His desire to be our governor is 100% dependant on the union members “feet on the street” and “financial backing” – and he know it because they told him so – and they’ve been testing him. He attempted to railroad the pension reform efforts of both San Diego & San Jose until he got called out by leaders in both cities – in the form of official letters. Only then did the lame excuses spew from his mouth. Just about every effort at pension reform has this man’s stamp of approval behind gut and amend efforts to effectively kill any serious reform or taxpayer representatioin.

    David Lowe – the guy is a very genoursly paid union advocate/liar. While his arguments may contain a shred of truth (most lies contain some truth which is what makes for a good lie/liar) he is counting on the ignorance of the reader – you and I. Unfortunately for Dave Low most of us already understand his arguments are nonsense during the first read through. Same can be said for Steve Maviglio – he’ll say anything if he’s paid the big bucks to do so – and he is.

  58. SeeSaw Says:

    Captain, I am a 77 yr. old, retired female who worked 41 years in the public sector as a municipal employee. I am not a participant in the CalPERS Ambassador- program. Everything I do and write on the comment forums is me alone–I do not collaborate with any other person or organization when it comes to my commenting on the few forums that are available to me–I do not do Facebook either. (At least this blog owner allows me to be here. The Calwatchdog site does not post any comment of mine, that it finds contrary to its own position.)

    I have never met David Lowe in person, but I have seen him in person–he was a presenter at the CalPERS dialogue, which I attended in LA a few year’s ago. He is a very smart man and a good leader for the classified school employees. I have a lot of personal praise for that union, because it represents part-time, classified, school employees, that are probably the lowest paid members of such group and keeps them around after retirement. The municipal unions do not do that. I am not a member of any union since my retirement–I belong to RPEA of CA. a non-profit organization that exists to protect CalPERS pensions. It employs a lobbyist to advocate for retirees with the legislature and tracks legislation of interest to CalPERS retirees. We have newsletters–we do not have CB or contracts.

    I am on the particular Sac Bee comment forum your are quoting here. If you want to talk about phonies, the two commenters you are quoting here are that for sure. Paris Hilton should be ashamed–masquerading as a beautiful young woman like the real PH. I say that the commenting PH is a male disciple of the Koch Bros. .

    As for who wants to be the next Governor of CA: My money is on Newsom.

    Captain, you are not very good, when it comes to powers of perception.

  59. SeeSaw Says:

    After Jerry Brown finishes his next term, that is.

  60. Tough Love Says:

    Captain, It’s actually WORSE than you stated in your #1 above.

    First of all a 10% (worker) 40% (taxpayer) split is 20%/80% (not 25%/75%). And the 40% CURRENT Taxpayer contribution isn’t even sufficient to cover the VERY rich Safety worker Plan’s Normal Cost (using appropriate and realistic liability discount rates),let alone amortize the substantial unfunded liability..

    When everything is PROPERLY accounted for, CA safety workers rarely pay more than 10-15% of the total cost of their VERY rich pensions. The Taxpayers pay the balance.

  61. SeeSaw Says:

    Don’t forget TL. You, as a taxpayer, are not paying any more than your public worker counterpart, who is in your taxpayer-group. Now I am waiting for you to come up with a definite dollar amount–the States’s libability to CalPERS is 3% of the total budget. Once you isolate that 3% from the rest of the budget and give it a dollar amount and then divide it by 38,000,000 residents, you are going to have a few pennies in state pension obligations per resident. I am certainly not going to do the work–so be my guest.

  62. Tough Love Says:

    Seesaw, If I were a CA Public Sector worker, I’d certainly support even MORE in taxes, knowing that for every $1 I PAY, I’ll get about $5 back in taxes from ALL CA citizens (BOTH Public and Private) mainly towards paying for my overstuffed pension and benefits.

    Of course the Non-Public Sector Taxpayers get just about NOTHING for THEIR incremental taxes, since all of it goes toward the huge pensions and benefits of the Public Sector workers.

  63. SeeSaw Says:

    No matter how you put it–those paying for the “overstuffed” pensions would not have the funds to do so, if the public sector had not put large portions of its “huge” pensions into buying the products and services of those private sector taxpayers. If you take back portions of what have already been paid and are scheduled to be paid, those private sector taxpayers are going to be worse off–not better of–fortunately you will never be able to do that in CA. I don’t have to show any proof here, of course, because its standard for you and your cohorts to spout opinions that you are at a loss to turn into facts.

  64. Tough Love Says:

    Seesaw, you have repeated this absurd observation several times. The response I gave your earlier (and pasted below) still applies. I’d love for you to respond as to why my response is not accurate.
    ———————————————————————
    “Would it be any less beneficial to the the economy if HALF of your (and all other Public Sector workers) excessive pensions were not granted and the funds not taken from the Taxpayers (to fund the 80-90% balance of your pension), and remained in the Taxpayers’ pockets for THEM to spend in that same economy ?”

  65. SeeSaw Says:

    Yes, it would be less beneficial, because the amount of money each taxpayer would save, individually, would amount to pennies, and the amount taken from the public employee would be a larger single chunk, and it would not be put into the economy! Every survey done on the subject of DB pensions has said that such pensions are a boon to the economy–they are job-drivers. There is no way you can dispute those reports. which are facts–not opinions like you spout. .

    Talk about absurd–your continual whine that public and private employees who are counterparts in those, respective, sectors must be paid the same salaries and benefits is quite that!. You are trying to compare apples and oranges, and it ain’t going to happen–absurd indeed!

  66. Tough Love Says:

    SeeSaw, I read, and re-read, and re-read your last comment thinking that perhaps there is some sense to it somewhere/somehow .

    Sorry … couldn’t find any. As a matter of fact, you seems to be saying that (Public Sector workers) stealing a little bit from a LOT of people (all Taxpayers, both Public and Private) is OK.

    Just a bogus excuse trying to justify the grossly excessive (80%-90% TAXPAYER paid-for) Public Sector pensions.
    _________________________

    And YES, the Total Compensation (cash pay plus pensions plus benefits) if comparable Public and Private Sector SHOULD BE quite close. That’s not comparing Apples to Oranges, it’s basis common sense …. something you seem to have in VERY short supply.

  67. SeeSaw Says:

    There is a difference between taking $1,000 from one person and giving back a dime each to 10,000 people. You do nothing to help the economy or those taxpayers if you do that. The pension liability is a line-item on a budget. If that line-item is wiped out, the money would just be transferred to some other item. You would still pay the same taxes and there would be nothing extra in your pocket. It would be a different situation if there were a specific pension assessment District that is abolished. There is not, where I am. My property taxes are $500/yr. and my state income tax is $1850/ yr.–not excessive in my view.

  68. SeeSaw Says:

    I reread you comment too. More opinions. I beg your pardon—public workers do various jobs and receive salaries and benefits for performing those jobs. You just keep forwarding your opinions which are not facst. Who is stealing?. I am just stating economic facts–you insist on continuing with your insults.

  69. Tough Love Says:

    SeeSaw, Your example of $1000 vs 10 cents makes as little sense as over-pensioning Public Sector workers because their resultant (greater) expenditures helps the economy. I’m guessing that given the ratio of Public Sector workers to all Taxpayers, reducing the annual pension of each retiree (and future Public Sector retirees) by $1,000 puts $100-$200 in each Taxpayer’s pocket.

    The benefits to the economy would be in equilibrium, and be a MUCH fairer and just allocation of total economic resources.

  70. SeeSaw Says:

    Keep the blinders on TL. Fine with me–I know you love to opinionate. You are dead wrong in your assumptions–but who cares!

  71. Tough Love Says:

    The word is “opine”, not “opinionate”.

  72. Worker bee Says:

    No matter what changes are made in the future, I don’t think it’s right for a city to renege on their obligation to provide a contractual pension for a worker already in the system. If a cop or fireman works 30 years for the city, you can’t tell him now that his pension won’t be there for him. That’s simply not right.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: