San Bernardino cuts deal to pay CalPERS debt

Bankrupt San Bernardino announced an agreement with CalPERS last week to pay off an unprecedented pension debt owed for skipping payments to the pension fund for a year — $13.5 million, plus several million more in penalties and interest.

Details of the agreement reached in closed mediation were not released. But the city said in a court filing the CalPERS agreement “will help form the basis” for a debt-cutting plan needed to exit bankruptcy.

Whether the city’s “interim agreement” with CalPERS means the city’s debt-cutting “plan of adjustment” to exit bankruptcy will exclude pensions is not revealed in the court filing.

San Bernardino has not publicly proposed a pension cut. A sketchy plan for operating in bankruptcy only proposed a “fresh start” that would “reamortize CalPERS liability over 30 years,” perhaps cutting costs $1.3 million in the first year.

Last week, an attorney for San Bernardino emphasized the importance of the city’s relationship with the pension system during his opening remarks at a status hearing with U.S. Bankruptcy Judge Meredith Jury.

“The importance of this agreement to mediation and the case cannot be overstated because of the size of the CalPERS claim, the importance of CalPERS and its relationship to the city and because the city believes based on discussions with unions and retirees that sustaining their relationship with CalPERS is very important,” said Paul Glassman, the San Bernardino Sun reported.

The cash-short city’s decision to skip employer payments to CalPERS, after an emergency bankruptcy filing in August 2012, would be grounds for termination of its CalPERS contract, if the city was not in bankruptcy. The city resumed payments last July.

CalPERS responded by attempting to sue San Bernardino for payment in state court. The federal bankruptcy judge blocked the attempt, saying employee pay would be threatened and the ability to reorganize in bankruptcy undercut.
SB Logo

Then CalPERS opposed San Bernardino’s eligibility for bankruptcy, followed by an appeal when the judge ruled the city eligible. The agreement announced last week delays action on the appeal.

CalPERS also filed a brief in support of an appeal by the state Department of Finance and the state Controller of the bankruptcy judge’s ruling protecting $15 million in city tax revenue.

The judge blocked a state attempt to withhold $15 million in San Bernardino sales and property tax revenue. The state said the city had not returned a similar amount of unspent housing funds after the state shut down local redevelopment agencies.

Unlike San Bernardino, Vallejo and Stockton continued to make their full CalPERS payments after filing for bankruptcy. The unprecedented San Bernardino lapse in payments was mentioned as CalPERS took several protective steps.

In a move said to be already under way due to low interest rates, CalPERS lowered the earnings forecast for terminated plans from 4.82 percent a year to 2.98 percent, sharply increasing the debt that must be paid if employers leave the system.

In April last year, the CalPERS board approved a staff proposal to sponsor legislation that would “provide CalPERS with a present lien on all assets of a contracting public agency in the amount of all obligations owed to the system.”

After concluding negotiations with CalPERS, the court filing last week said San Bernardino officials are “now fully engaged” in negotiations with two holdout unions, police and firefighters.

An agreement reportedly may be near with police. But firefighters, worried the city may plan to contract for fire services, filed a request last week to be released from court-ordered mediation, saying talks with the city were stalemated.

The city filing said San Bernardino plans to ask the judge for authorization to impose a “last, best and final offer” if unions do not agree to new cost-cutting contracts when negotiation procedures are completed, probably by the end of August or sooner.

The San Bernardino City Council is scheduled to adopt a new budget today (June 23). To make the spending plan balance, deep spending cuts are said to be needed in addition to the debt deferrals allowed in bankruptcy.

“Since employee compensation represents approximately 75 percent of the city’s costs, many of the cost reductions inevitably are labor related,” said the court filing.

The city’s financial advisor, Michael Busch of Urban Futures, argued at the hearing last week that the city needs to cut employee pay to survive, the San Bernardino Sun reported.

“He divided firefighters’ compensation into three categories of 40 firefighters each,” the Sun said. “The top 40 average $197,000 per year, the middle $166,000 and the bottom-third $130,000 per year.”

The firefighters union, which has talked with the city outside of the closed mediation, did not mention pension cuts while listing the spending reductions sought by the city.

“The city is currently trying to eliminate from the City Charter those provisions that provide the salary formula for public safety and that protect the very existence of the City of San Bernardino’s Fire Department,” said the firefighters court filing.

“The city is also moving forward with (1) the closing of at least two, and as many as four, fire stations; (2) the elimination of between four six pieces of apparatus; and (3) the reduction of personnel associated with these cuts.

“The city is looking at changing work schedules and/or contracting out Fire Department services to other public and/or private entities.”

An unusual city charter provision, “section 186,” links the pay of San Bernardino police and firefighters to the average pay in 10 other cities, most much wealthier. Due to the link, police have twice received pay raises costing $1 million during the bankruptcy.

A citizens charter review committee appointed by the city council recommended, after several public hearings, that Section 186 be replaced with collective bargaining. The city council is expected to put the measure on the November ballot.

Stockton, which filed a month before San Bernardino, theoretically could be approved to exit bankruptcy as soon as a hearing July 8. The judge may be considering a separate ruling to clarify whether CalPERS pensions can be cut in bankruptcy like other debt.

In Detroit, a federal bankruptcy judge has ruled that the city’s pensions can be cut. Michigan Gov. Rick Snyder signed legislation Friday for a “grand bargain” providing state and foundation money to ease pension cuts retirees are being asked to approve.

In a plan negotiated with unions, active Detroit workers will be switched to a “hybrid plan” that combines a smaller pension with a 401(k)-style individual investment plan.

“Trading down to a less generous pension plan is often said to be a legal nonstarter for government workers, so if Detroit succeeds, its hybrid could become a model for other distressed governments from Main to California,” a page-one story in the New York Times said last week.

Reporter Ed Mendel covered the Capitol in Sacramento for nearly three decades, most recently for the San Diego Union-Tribune. More stories are at Posted 23 Jun 14

44 Responses to “San Bernardino cuts deal to pay CalPERS debt”

  1. Tough Love Says:

    Send as clear message to all of the Unions/workers …. outsource the Fire Department. ZERO future growth in pensions & benefits …. instantly.

    Taxpayers, it’s time to take back YOUR City !

  2. SeeSaw Says:

    What a dreamer-schemer you are, TL. Many Fire Departments are outsourced. One contract is exchanged for another–what happens is, the firefighters themselves get benefits that are as good or better than what is already standard, and the entity giving up its own control gets less service. We should all hope for a good outcome between SB and CalPERS–something in the best interests of everyone. Just stay in NJ and mind your own business and everything will be alright.

  3. Shelby Says:

    So, firefighters are compensated on average between $130,000.00 and $197,000.00. Know wonder the city is “Bankrupt”. This kind of compensation with a high school education?

  4. Tough Love Says:

    Outsource fire protection … to a PRIVATE company. They’ll get TONS of VERY qualified recruits at 1/3 the compensation (cash pay INCLUDING all benefits) and the city will save 1/2 the current employee compensation costs for sure.

  5. SeeSaw Says:

    No such thing will be considered, TL. Such a pity, you seem so anxious to lower the standard of living for other people. If you like hearing and seeing yourself spout such wretched ideas, so be it. Dream on……………………..

    And to you Shelby: Those figures are line-item amounts that are budgeted. Workers do not receive it in the form of gross/take home salary. Why don’t you go out and find a publicly-employed firefighter that has no training or education beyond High School.

  6. Tough Love Says:

    No SeeSaw, it’s called advocating to remove unnecessary EXCESSIVE compensation

  7. Tough Love Says:

    SeeSaw Actually you’re correct when you saw that Shelby’s $130K-$190K are …”line-item amounts that are budgeted”.for cash pay + pension & benfit accruals.

    And because City NEVER truly budgets for the REAL (much higher cost of fully funding the Promised pensions & benefits over the worker;’s careers, but leaves some portion unpaid for and the responsibility of FUTURE Taxpayers), the TRUE cost is even higher….MUCH higher !

  8. Tough Love Says:

    THIS article sums up the Public Sector pension fiasco situation EVERYWHERE perfectly.

    Just substitute YOUR City/State for Illinois:,0,5874616.story

  9. SDouglas47 Says:

    Neither unbiased nor scholarly. Didn’t even have footnotes!!

    “The only apparent solution is to vote out every sitting politician, including judges, and start fresh.”


    Now THAT’S mature.

  10. Tough Love Says:


    Is your selfish and unbridled greed mature ?

  11. SeeSaw Says:

    Who appoints you to be the one to determine what amount of salary crosses over from reasonable to excessive, TL? I certainly wish everyone would have an excess of funds–then they could have a middle-class lifestyle–it takes a lot now, so I would appoint myself to determine what is excessive and guess that those who are getting the amounts that are so much larger than mine, are receiving what it takes to have that lifestyle. I am happier to see that condition than to watch people walking down the street with their shopping carts that are serving as suitcases and pantries. Never mind, though. Your suggestion that the City contract with a private fire service is absolutely ludicrous–so ludicrous that it will never happen in CA.

  12. S & P 500 Says:

    TL, actually I’m not too worried about monumental tax increases. Some states and muni’s can’t tax or borrow anymore because if they do the rich people will leave–places like Calif. or Chicago. They can’t end corporate tax breaks if they want to attract an Airbus or a Tesla. That only leaves the third option–budget cuts. I don’t see how firemen can prevent station closings. In San Jose they closed a third of their fire stations. If they need a new truck they can have a bake sale or a raffle for LEGO toys or something. Everything isn’t awesome for taxpayers or pension crooks–it’s all going to be about shared pain.

  13. SDouglas47 Says:

    Another logical fallacy.

    I’m not surprised.

  14. Tough Love Says:

    Quoting SeeSaw …….. “Who appoints you to be the one to determine what amount of salary crosses over from reasonable to excessive, TL?”

    Why do you twist the truth ?

    What I have said is that (the taxpayer paid-for share) of virtually all Public Sector worker Pensions & Benefits (not wages) are always AT LEAST 2X greater than that promised Private Sector counterparts (by their employers) making the SAME pay, working the SAME years of service, and retiring at the SAME age, and with that “AT LEAST 2X”…….. MOST OFTEN being 3X-4X and for safety workers, USUALLY 4X-6X.

    With Public Sector workers (on average) earning no less in “cash pay” than their Private Sector counterarts, and EQUAL Public /Private Sector “Total Compensation” (“cash pay” plus pensions plus benefits) being the appropriate and reasonable goal, there is ZERO justification for ANY (yes ANY) greater Taxpayer-funded Pubic Sector pensions & benefits let alone the MULTIPLES greater pension & benefit promises that are in place today.

    By ANY reasonable metric ……….. that is “excessive”

  15. Tough Love Says:

    S & P 500, I understand what you are saying, but in the States & Cities under the most distress, most of the obvious service cuts have already been taken, and with no more than very modest tax increases (for the reasons that you mentioned), that leaves ….. barely touched to date … the still grossly excessive Public Sector pensions & benefits (see my above reply to SeeSaw) as not only the single remaining material source of material expense savings, but rightfully, LONG overdue due to the underhanded Union/politician collusion (e.g., CA’s SB400) which led to thee grossly excessive pensions in the first place.

  16. Jeff Says:

    Just cut other City services ..Problem over……

  17. SDouglas47 Says:

    “Why do you twist the truth?”

    You have said, ad nauseum,

    ” Public Sector workers (on average) earning no less in “cash pay” than their Private Sector counterarts,” (sic)

    While even some of the MOST conservative studies have agreed that the average public worker receives as much as twelve percent less in “cash pay”, and as much as thirty seven percent less in the case of many professionals and PHDs, translating to an eighteen percent deficit in total compensation for some of the highest paid workers.

    These figures for TOTAL COMPENSATION include the cost of pensions and retiree healthcare discounted at a risk free rate. So comparing the pension to a private sector pension is irrelevant.

    In the case of the higher paid professional, the ” higher pension” does NOT “make up” for the eighteen percent compensation penalty. You, and others, are counting the cost of the pension twice.

    SOME public workers earn more than private sector equivalents. Some receive less. And there are some “egregious” examples. But your diatribes are a wild exaggeration.

  18. Tough Love Says:

    SDouglas47, You RAILED at me when I mathematically demonstrated the HUGE HUGE advantage in compensation for police & firemen, not countering my facts but only complaining why I focus on Safety worker compensation. While I do so because they have the most egregious compensation, can’t I say the same for you …. where you focus on the High level professionals and PHDs saying that they make much less in cash pay.

    Perhaps they do, but whatever overall compensation disadvantage that may exist for this group, I’m certain that the compensation advantage for safety workers FAR outstrips it in total.

    And who’s left? Well all but Safety and the High-level professions and PHDs … a middle-of-the-road group with “cash pay” likely very comparable in the Public/Private Sectors, but VERY CLEARLY with a HUGE advantage in pensions & benefits.

    Bottom line, when all comparable workers are taken in total, due the huge and overwhelming Public Sector advantage in pension & benefits, there is no way that it does not extend to overall “Total Compensation”.

    Distortion of the facts and selecting the studies that support your agenda doesn’t change that.

  19. SDouglas47 Says:

    I “railed” because your continuous use of safety workers leave the distinct impression that “$100,000” paychecks and pensions were typical of all public employees.
    You did NOT….EVER demonstrate a huge advantage in “compensation” for police and firemen. You compared their pension to that of a private sector employee who, even according to the most conservative studies, not “selected by me”, indicate that private sector workers almost ALWAYS take a smaller share of their total compensation in the form of pensions.

    Your math didn’t “prove” anything. You apparently never had a knack for “word problems” in the fifth grade.

    If a law enforcement worker has a total compensation of $150,000….and $40,000 of that is allotted to pensions….(27% of comp)

    And a similar private sector worker has compensation of $150,000….and $9,000 of that is allotted to pension……(6% of comp)

    Compare their pensions and the cops will be much higher.

    Compare the TAKE HOME pay while working and the private sector worker will be MUCH higher.

    Pensions outside the context of total compensation are meaningless. Actually WORSE than meaningless because they “twist the truth”

    I did NOT “focus” on doctors and professionals. I mentioned them in the context that they are part of a continuum. Almost all valid studies, not just “selected studies that support my agenda” describe the compressed salary range typical to most government employees. Lower educated workers tend to make slightly more than their private sector equals. Higher educated workers earn much less (I didn’t “select” American Enterprise Institute, but I did cite and reference them several times, and they are not dupes of the union) and they concur that average public sector cash pay is about twelve percent less than private sector.

    Other “unbiased scholarly” studies (with footnotes) describe the same salary compression, but describe public sector workers, on average, as “roughly equal”. You are free to disagree with ALL the studies, because you are Tough, Love. That does not negate the fact that your suggestion to reduce the future accruals of ALL public sector workers is….just…plain….dumb.

    You would decrease even further the relative pay of those in the upper categories, good luck with attracting and retaining qualified personnel. And the poorest government workers would be below poverty level in retirement. Yes, they would be no worse off than private sector peers, but what good to save money on pensions, then pay it out in medicaid and other assistance instead?

  20. Tough Love Says:

    Quoting SDouglas47 … “I “railed” because your continuous use of safety workers leave the distinct impression that “$100,000″ paychecks and pensions were typical of all public employees.”

    Your full of crap as I SPECIFICALLY demonstrated that the MUCH MUCH (4.62 times) greater salary required by the Private Sector worker (to get the SAME pension as the police officer) was NOT even a function of the Police officer’s pay, but EXCLUSIVELY due to the outrageously generous pension formula and provisions.

    And as proof, below I pasted the bottom part of that long mathematical demonstration showing EXACTLY what I just stated.
    And to preemptively address the anticipated comeback ………… the 4.62 times greater CA safety pension is NOT a function of the Officer’s final pay. It would remain 4.62% even if the officer’s final pay (and hence starting pension) were 10%, 20% or even 50% lower.

    The 4.62 time greater CA Safety worker pension results from the MUCH richer Formula and MUCH more generous “provisions” as follows:

    (1) Benefit from the richer “formula” of 3% vs 1.25% = 3.00/1.25= 2.40 greater
    (2) Benefit from only the CA safety worker getting COLA increases = 18/13 = 1.3846
    (3) Benefit from no CA Safety worker pension reduction for full (unreduced) retirement at age 55 = 1.00/0.72 = 1.3889

    The above beneficial ratios are multiplicative, giving the overall advantage of 2.40 x 1.3846 x 1.3889 = 4.62 times.

  21. toothbrushes Says:

    Private fire services. What a wonderful idea, $65-$75 thousand per year jobs with 401k, and social security, full medical, holidays, and sick time. Incentive bonus for achieving service benchmarks. Nah, we don t need that, $120k jobs with a proven path to filing for disability to work on the golf game, before retirement. Two homes, boat,motorcycle, Lexus. What kind of moocher wouldn’t t grab that?

  22. SDouglas47 Says:

    ¡Ay, caramba!

    I sincerely hope you don’t do your own taxes.

    I understand.

    I’ve seen your example dozens of times. I even read it all the way through once.

    And I understand that the relationship would be 4.62% even if the cop’s salary was $50,000.

    A. The ” outrageously generous pension formula ” is much higher than the private sector worker.

    B. The PERCENTAGE of the LE officer’s total compensation allotted to retirement is also “outrageously higher”.

    C. Your math is OK, but it doesn’t mean anything.

    Take your example to a fifth grade math teacher. She might make you sit in the corner.

  23. Tough Love Says:

    SDouglas47, Given the advanced training I have in mathematics (and other things financial), when you end your weak counter-arguments with statements like ….”Take your example to a fifth grade math teacher. She might make you sit in the corner.” …. you show you desperation to protect a clearly unjust and unsustainable pension & benefit structure, as well as your immaturity.

  24. SDouglas47 Says:

    Advanced training or not, you are comparing totally dissimilar workers. One has a higher pension formula AND a much larger percentage (30%+/-) of his total compensation is allotted to pensions. The $500,000 worker has only 4 to 5%. The comparison is meaningless.

  25. Tough Love Says:

    SDougals47. Any ‘dissimilarity” is removed by my comparing 2 workers (Public & Private Sector) retiring at the SAME age, with the SAME pay, and CALCULATING the pay that the PRIVATE Sector worker would need to earn to get the SAME pension as the Public Sector worker …. and the result is so great specifically BECAUSE the Police Officer’s pension formula (and generous “provisions”) is so grossly excessive.

    Rather than my comparison being “meaningless”, you simply refuse to accept it because you can’t fathom admitting that Public Sector workers are grossly over-compensated.

  26. Tough Love Says:

    “SAME pay” in my above comment should have been “SAME years of service”

  27. SDouglas47 Says:

    “Same pay” is a BIG dissimilarity. If the $500,000 worker had diverted 30% of his income to retirement savings, as the LE officer did, he would have a retirement to make your head spin.

    And the example is WORSE than meaningless. It’s misleading.

  28. Jeff Says:

    Scottsdale Arizona has a private fire dept..They perform just like everybody else..Insurance rates are lower than most cities that have public fire departments..These firefighters do productive work when not firefighting, which is nearly all of there work day…They very, very seldon have a fire…

  29. SDouglas47 Says:

    I recall reading that San Bernadino recently hired a consultant to look into privatizing their firefighting. It’s evidently not as simple as it sounds. Not sure what the situation is in SB, but nationally, only about 5% of firefighters time is actual fire incidents. They spend more time on false alarms than actual firefighting, and more than half their time is spent on rescue and EMS calls.

    And privatizing is not necessarily the answer. According to The Reason Foundation, “Contracts may be ill-conceived, performance monitoring may be lax, and service providers may not fulfill their obligations.”

    It looks like the city may have given up on privatizing and decided instead to reduce the size of the fire department and shift more EMS calls to another branch.

    Interesting no one yet has commented on:

    ” In April last year, the CalPERS board approved a staff proposal to sponsor legislation that would “provide CalPERS with a present lien on all assets of a contracting public agency in the amount of all obligations owed to the system.”

    How would that affect any future bankruptcies?

  30. Tough Love Says:

    SDouglas47, I had seen that CalPERS proposal before. I doubt that it is meaningful as the Federal Bankruptcy Court would likely rule it unenforceable as part of any Federal bankruptcy proceedings (or Plan of exit therefrom).

  31. spension Says:

    Well, of course public pensions are too high.

    But the private sector is not worthy of comparison, as documented by Ellen Schultz, who shared a Pulitzer and writes for the Wall Street Journal. The avarice and fraud in the private sector dwarfs the public sector.

  32. SDouglas47 Says:

    SOME public pensions are too high. And they may not be the ones you think.

    Level headed logical changes are needed. Not knee jerk, emotional, meat-axe measures.

  33. Tough Love Says:

    Quoting … “Well, of course public pensions are too high. But the private sector is not worthy of comparison……..”

    Well, you can repeat the latter hundreds of times but it won’t make it true. With 85% of all workers in the PRIVATE (not PUBLIC) Sector, the compensation afforded PRIVATE Sector workers sets the standard for “Market-Rate” compensation, NOT the other way around.

    And with “cash pay” in the 2 sectors near equal (for ALL comparable jobs, taken together) and EQUAL “Total Compensation” (cash pay + pension + benefits) the appropriate goal, there is simply ZERO justification for the current structure in which PUBLIC Sector pension & benefits are ALWAYS MULTIPLES (typically 3x-4x) greater in value at retirement than those of their Private Sector counterparts.

    It’s WAY past time for the financial “mugging” of Taxpayers by the insatiably greedy Public Sector Union & workers to end ….. via VERY material (50+%) reductions in the pension & benefits promised all CURRENT workers, and the MOST EFFECTIVE way to do so (not withstanding your repeated protests to the contrary) is to PERMANENTLY get the enabling Taxpayer-betraying politicians OUT of the decision-making process by hard freezing all current Public Sector DB Plans and shifting all CURRENT workers to MODEST DC Plans (comparable to what Private Sector taxpayers typically get) for their future service.

    And since I’m CERTAIN that you will respond to this comment with more BS reasons why we should not switch to DC Plans, I am preemptively posting a link (below) to an article entitled …”Addressing Common Objections to Shifting from Defined-Benefit Pensions to Defined-Contribution Retirement Plans”. Readers, please read it and judge for yourself.

  34. spension Says:

    The principal financial mugging of people’s pensions in the US has been committed by the private sector; I don’t have to keep repeating it because a Pulitzer-prize winning journalist for the Wall Street Journal has documented it carefully:

    Of course, the private sector wanted its $10 million per executive bonus contracts honored when the US Taxpayer bailed out AIG.. what did that cost, $1.2 billion or so? Tough Love loves it when the private sector gets bailed out by the US Taxpayer. More profits for his private investments.

    There is absolutely no logical grounds for using the fraud and crime ridden private sector retirement system in the US as a comparison.

    DC plans in the US have a giant loophole… companies can freeze and seize them for fees, at any level of $ the company feels is appropriate. See

    The private sector seizing individuals’ DC plan $ is something Tough Love would cheer and applaud over… more profits for him and his friends!

    As for the article, it freely admits that DC plans are completely flawed and in need of drastic overhauls. They are not ready for prime time in the US retirement industry, and in fact, were *NEVER, NEVER* intended to be the principal retirement savings vehicle. They were supposed to be a supplement to DB plans for thrifty individuals.

  35. Tough Love Says:

    spension, not one word of what you said is relevant to the subject of this blog article, pension (CalPERS) debt due to the grossly excessive pension & benefit promises.

    spension is a charlatan… always trying to divert the readers attention AWAY from the VERY much needed Public pension reform (by freezing these grossly excessive DB pension) …. typically by yacking away about the evil doings of private sector executives.

    Yes they are putzes, but the need to address THAT problem in no way lessens the need for very MATERIAL Public Sector pension reform.

    Readers ………… don’t just take my word (and CERTAINLY not spension’s word). Read the following (same link I posted above) and judge for yourself.

  36. SDouglas47 Says:

    ” And with “cash pay” in the 2 sectors near equal “?????

    ” there is simply ZERO justification for the current structure in which PUBLIC Sector pension & benefits are ALWAYS MULTIPLES (typically 3x-4x) greater in value at retirement than those of their Private Sector counterparts.”
    “It’s not FAIR, she got more than I did!!!!”

    Every parent of more than one child has heard that more than once.

    It’s not fair!!
    It’s not fair!!
    IT’S NOT FAIR!!!

    My sister said, after hearing that several times, she began to answer:

    “Honey, she got more because we love her more than we love you.”

    Now that’s tough love.

  37. Tough Love Says:

    Sorry, buster, but when the Taxpayers pay your way (your salary, your pension, and your benefits), we MUST have a say, and that includes EVEN IF our own elected officials betrayed us.

    You do NOT deserve a better deal on our DIME…. and bribing our elected officials with campaign contributions to get it doesn’t legitimize it. It just reinforces the Taxpayers’ right to renege on such grossly excessive promises.

  38. SDouglas47 Says:

    The whole point of the story is that “grossly excessive promises” is YOUR opinion.

    Like a child, you see unfairness everywhere.

    Some public workers are compensated less than private sector counterparts, some are compensated more.

    “EQUAL “Total Compensation” (cash pay + pension + benefits)”

    will never be 100%. There are too many disagreements even in how to interpret the data for comparison. There are huge differences in regional pay that affect comparison. And there are differences over time. Public sector wages and benefits are slower to change with economic conditions. They rise more slowly during recoveries and fall more slowly in recessions.

    Most of the data we are looking at now is three to eight years old.

    As I asked Gopichand Jasoos last week, are ALL public workers “thieves” in his mind? They are NOT all overcompensated, despite your paranoia or persecution complex.

  39. SDouglas47 Says:



  40. SDouglas47 Says:

    And spensions comments are entirely relevant.

    The charge is that private sector pensions are disappearing because they are unsustainable, and public pensions should follow suit.

    I haven’t read Ellen Shultz’s book, but I have seen and read interviews. It makes one wonder who is REALLY behind the movement to get rid of defined benefit pensions.

    And why?

  41. spension Says:

    If Tough Love doesn’t like the *facts*, he always starts ranting about charlatans and irrelevancy of those facts.

    It is *Tough Love* who brings up the private sector in these blogs. But when the facts that executives in the private sector have systematically looted the old private sector DB system, he hysterically whines that those facts are irrelevant.

    Ellen Schultz is a Pulitzer-winning Wall Street Journal reporter. Who are you going to believe, Schultz or Tough Love?

    That Tough Love’s beloved private sector executives at AIG demanded public taxpayer bailouts for their $10 million bonus contracts, costing the taxpayer $1.2 billion, shows the true motive of Tough Love:

    Use Taxpayer $ to subsidize Tough Loves’ profits.

    You can see how: DC plans allow unlimited fees to be skimmed, for things like Kentucky Derby trips for private investment executives husbands and boyfriends. see

    Tough Love’s beloved admits this clearly:

    Argument 2: Defined contribution plans are more expensive to operate with higher administrative costs due to higher financial management and trading fees.

    It is true that a traditional DC plan incurs higher administrative costs than a DB plan.

  42. Tough Love Says:

    Spension …. just more of your “diversion” for the issue at hand …the grossly excessive DB pensions granted Public Sector workers everywhere …. always MULTIPLES greater in value at retirement than those granted their Private Sector counterparts, while the Taxpayers are responsible for 80-90% of the total Plan costs.

    Taxpayers …. WHEN are you going to DEMAND that these grossly excessive PUBLIC Sector DB pension Plans end ?

  43. SDouglas47 Says:

    Actually, the “issue at hand” is whether San Bernardino will pay the pension debt due to CalPERS.

    Apparently the answer is yes.

    At the same time, the city is working with employees to reduce costs. It doesn’t sound like the city is even considering pension cuts.

  44. spension Says:

    Taxpayers… when are you going to DEMAND that the private sector stop giving away $10 million per executive bailouts like those given to AIG executives, who bankrupted their company?

    Taxpayers, when are you going to get the $24 trillion back (according to the SIGTARP) of taxpayer money that subsidized the private sector?

    Public DB pensions did grow to large, but Tough Love exaggerates as usual. Teachers pensions in California, according to the Fix Pensions First study, are not `multiples’ greater in value.

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