Bankruptcy judge: CalPERS pensions can be cut

A federal judge ruled yesterday that CalPERS pensions can be cut in bankruptcy like other debt. He rejected the argument that the giant system is an “arm of the state” with pensions protected by federal law and two state laws on contracts and liens.

U.S. Bankruptcy Judge Christopher Klein, who has called the issue of whether CalPERS pensions can be cut in bankruptcy a “festering sore,” delayed until Oct. 30 a ruling on whether Stockton can exit bankruptcy without cutting pensions.

Stockton does not want to cut pensions, arguing they are needed to be a competitive employer, particularly for police. The city reached agreements with three bond insurers owed $265 million, all labor unions, retirees and other major creditors.

But Stockton could not negotiate an agreement with a lone holdout, two Franklin bond funds owed $36 million, triggering a trial in May on the Stockton “plan of adjustment” to cut debt and emerge from the bankruptcy filed two years ago.

Franklin argues that an exit plan that provides full payment of the city’s “massive” pension liability, while paying Franklin a penny on the dollar, cannot be confirmed under the federal bankruptcy code requiring fair treatment of creditors.

Klein issued his CalPERS decision after receiving extensive written briefings from both sides he requested at the May trial. His lengthy oral ruling, covering the disputed legal points in detail, may be followed by a written decision.

“We have a plan that proposes not to adjust pensions,” Klein said. “I have concluded that pensions could be adjusted, at least the CalPERS contract could be adjusted, and by inference the pensions could be adjusted.”

Klein

Klein


A federal judge ruled in the Detroit bankruptcy last fall that pensions can be cut. CalPERS joined in the appeal, arguing that Detroit has a city-run plan and that CalPERS is an arm of the state whose operations are protected under federal bankruptcy law.

“We disagree with the judge’s opinion on the issue of pension impairment,” CalPERS said in a news release. “This ruling is not legally binding on any of the parties in the Stockton case or as precedent in any other bankruptcy proceeding and is unnecessary to the decision on confirmation of the City of Stockton’s plan of adjustment.

“CalPERS will reserve any further comment until such time as the court renders its final written decision. What’s important to keep in mind is what the City of Stockton stated in court today: that they can’t function as a city if their pensions are impaired.”

Matthew Jacobs, CalPERS general counsel, said in a separate news release: “The real precedent of today’s proceedings is that even if municipalities are allowed to impair pensions in the rare situation of bankruptcy, cities like Stockton can make the smart decision to protect the pension promises for their public employees.

“The city has made a choice to protect pensions for its public employees and find a reasonable path forward to a more fiscally sustainable future. This is the right decision. While we disagree with today’s ruling on pensions, we are hopeful that Judge Klein will approve Stockton’s plan. Providing great services to a city requires great employees and Stockton said today in court that it can’t function as a city if pensions are impaired.”

CalPERS has taken several steps, some going back decades, to avoid a ruling like the one Judge Klein made yesterday.

Vallejo officials said they considered cutting pensions in bankruptcy, but chose not to try after CalPERS threatened a lengthy and costly legal battle. Vallejo cut deals with all creditors, avoiding a rare trial as on Stockton’s plan to “cram down” debt.

The Vallejo bankruptcy prompted public employee unions to back legislation requiring cities to get permission from a state panel to file bankruptcy. Some union officials said the threat of “pulling a Vallejo” could affect labor contract bargaining.

The bill, AB 506 in 2011, was altered to require an attempt in neutral mediation to reach an agreement with creditors before filing bankruptcy. Stockton failed to get an agreement during a 90-day mediation before filing for bankruptcy on June 26, 2012.

A month later San Bernardino made an emergency filing for bankruptcy without first trying mediation. Then San Bernardino, saying it was in danger of not making payroll, took an unprecedented step: skipping payments to CalPERS for a year.

The failure to make payments gave the California Public Employees Retirement System grounds to terminate its contract with the city, probably triggering a deep cut in pensions for San Bernardino current workers and retirees.

Last June San Bernardino announced an undisclosed agreement with CalPERS, reached in closed-door mediation, to pay the $13.5 million in skipped payments, plus several million more in penalties and interest.

San Bernardino is still struggling to reach agreements with labor unions, receiving court approval to modify a firefighter contract. City officials have said they do not expect to have a debt-cutting plan of adjustment until early next year or later.

In the Stockton bankruptcy, Judge Klein said during the trial in May that one of his options was ruling on whether CalPERS pensions could be cut without necessarily finding that Stockton pensions should be cut.

Part of his analysis yesterday that CalPERS pensions are not state “governmental or political powers” protected under federal bankruptcy law is that while state workers are in CalPERS by statute, cities choose to join CalPERS.

Klein said California cities have the option of forming their own pension systems, joining a county pension system, hiring a private pension provider or withdrawing from CalPERS, if they can afford to do so.

He concluded that benefits not prescribed by state law are not “governmental or political” powers protected by the federal bankruptcy law, but instead are unprotected “business powers.”

Klein said a CalPERS-sponsored state law preventing cities from rejecting their CalPERS contracts in bankruptcy is “flat-out invalid” under the constitutional “supremacy clause” giving federal law priority over state law.

The judge said another CalPERS-sponsored state law that gives CalPERS a lien on all city assets, except wages, when they declare insolvency is an invalid attempt by the state Legislature to “edit” the federal bankruptcy law.

Stockton argues that its employees and retirees have a fair share of the bankruptcy burden with pay cuts, workforce reductions and the elimination of retiree health care, a $545 million long-term debt replaced with a $5 million lump sum.

Klein’s ruling on Stockton may hinge on the city’s decision to place Franklin in the same class of debtors as retirees, who voted to accept the big cut in health care with the promise that their pensions would not be cut.

The low payment to Franklin is similar to the retiree health care cut. Franklin argues that it was “punished” for rejecting a city offer in closed-door mediation and unfairly placed in the debtor class to be “swamped” by the retiree approval of their health care cut.

The city argues that Franklin is properly in the class because most of its debt is unsecured. After the judge ruled that Franklin’s collateral (two golf courses and a park) were valued at $4 million, Stockton amended its plan to pay that amount.

But Franklin wants payment for the remaining $32 million of unsecured debt.

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 2 Oct 14

96 Responses to “Bankruptcy judge: CalPERS pensions can be cut”

  1. Captain Says:

    Thank you, judge Klein. It is a start.

    I like this: “Klein said a CalPERS-sponsored state law preventing cities from rejecting their CalPERS contracts in bankruptcy is “flat-out invalid” under the constitutional “supremacy clause” giving federal law priority over state law.

    And this: “The judge said another CalPERS-sponsored state law that gives CalPERS a lien on all city assets, except wages, when they declare insolvency is an invalid attempt by the state Legislature to “edit” the federal bankruptcy law.”

    – and that is a very important distinction.

    It appears the CalPERS sponsored state laws are frivilous at best. That isn’t surprising.

  2. Captain Says:

    CalPERS is CORRUPT – and they will continue to use tax payer funding, meant to pay for their members pensions, to continue to fund their fight against taxpayers. They call it the cost of doing business – using our money to punish us.

    CalPERS needs to be completely restructured. They are a very DESTRUCTIVE & ROGUE organization on their best day. Either that or they need to go the way of the DINOSAUR.

  3. larrylittlefield Says:

    “Stockton does not want to cut pensions, arguing they are needed to be a competitive employer, particularly for police.”

    The same politicians would probably favor cutting benefits for future employees, but not for current retirees, as they have all over the U.S. But how does that help recruitment?

    It’s really just favoring those in the deal at the expense of everyone else.

    How about first cutting the pensions of the retired, and soon to be retired, back to what they were promised when they were hired? I’d agree that a deal is a deal, but those retroactive increases were extremely unjust toward ordinary people.

    That wouldn’t make up for all the extra money already paid out, and wouldn’t make up for any taxpayer underfunded, but at least it would provide something closer to fairness. And it’s hard to argue that Stockton needs to pay those already retired more than they were promised when they were hired to attract future employees. Particularly while paying future employees less than Generation Greed had been promised to begin with, to make up for what they did.

  4. Larry Robinson Says:

    When is a commitment really a commitment and not just an empty promise? I’m certainly against pension spiking and would support upper limits in retirement compensation (no one should be getting more than their actual annual salary as an annual pension); but to unilaterally change the conditions of a mutually agreed upon contractual obligation (i.e. defined pensions for current retirees) is both unfair and, currently, still illegal. I’m sympathetic to the recruitment argument, but not as sympathetic as I am to those who have worked for decades under the assumption that they would have a certain level of compensation upon retirement (often forgoing other benefits and COLAs to ensure that THAT beneift wasn’t adjusted) and then have that summarily reduced to help pay for UNSECURED debt.

  5. RSpringbok Says:

    Bankruptcy is supposed to distribute pain proportionally to all creditors.

    Franklin earns $8 Bil a year in revenues with a 27% profit margin — even if they had to write off the whole $32 million, it would be hardly noticed by neither the company nor the stockholders. $32 mil is a mere 0.4% of their annual revenue stream.

    Now consider the retired Stockton clerk or janitor. A 60% cut to their perhaps $30k or $50k fixed income, on top of already losing their healthcare would be devastating to them.

    Cutting retirees 60% on modest incomes to offset Franklin’s 0.4% loss would be a gross injustice.

  6. Ray Krause Says:

    CALPERS would do better to put their resources toward encouraging their members’ increased work productivity to help pay for their rich benefits.

  7. SeeSaw Says:

    I do get confused regarding the subject of federal bankruptcy law vs. state bankruptcy law. Is the Chapter 9 Bankruptcy code not federal law? There are articles 903 and 904 in the Chapter 9 code which set forth the conditions for handling debts by the debtor. As I recall, the Chapter 9 code leaves those adjustment plans in the hands of the debto,r to be approved or unapproved by the judge. From my standpoint, it seems that the debtor has always had the ability to cut whatever benefits it decides to target–the main point being that the judge can only approve or disapprove–he cannot order the debtor to do what it does not want to do.

  8. Shane Patrick Connolly Says:

    Larry Robinson – So, are you suggesting that they be able to invalidate those retroactive pension increases that were granted but not properly funded, since they were not what the employees agreed to when they were hired?

  9. larrylittlefield Says:

    “To unilaterally change the conditions of a mutually agreed upon contractual obligation.”

    Deals were cut between unions and the politicians they supported. The general public was not informed, and got nothing in return. And pensions were increased at a time when most people were being made less well off.

    “Bankruptcy is supposed to distribute pain proportionally to all creditors.”

    How much pain have the residents of Stockton suffered, in higher taxes and diminished services, already? How does that compare with the sacrifices of those who scored increased pensions and walked out the door?

    To the executive/financial class and the political/union class, everyone else is just a serf.

  10. SeeSaw Says:

    @Ray K, CalPERS is just an agency that is a holding company, charged with receiving, investing, and distributing funds according to the laws set forth by the State of CA. It has nothing to do with assessing the work productivity of its, respective, members. All CalPERS cares about is that the payments come in, according to the agreements.

  11. SeeSaw Says:

    @Larry L, retroactive pension formula increases are already outlawed in PEPRA. I received a retroactive increase in 2001, according to the laws enacted by the State of CA, allowing my employer to provide such–nothing illegal took place. You will never be able to go back and start taking money away from pensioners who have legal contracts with CalPERS, just because you weren’t a beneficiary.

  12. SeeSaw Says:

    All you commenters who are not CalPERS members seem to continue to gloss over the reality that CalPERS had one-fourth of its entire portfolio wiped out in the recent global, financial disaster which was caused by Wall Street. If that had not happened, we probably would not be talking about unfunded plans, which were funded before the bottom dropped out. Why don’t you pick on the real culprits in this scenario, instead of just being envious about someone else being covered by a DB pension, that you didn’t get included in, for some reason.

  13. Stuart Mill Says:

    Judge Klein obligated to comment on Calpers and the California state protections. He feels those protections are unconstitutional under Federal law. The bankruptcy is different, but he seems to be preparing to rule against the city’s plan. This is bad for the city, but it looks like he feels he would be remiss to ignore the premise under which Calpers operates. I am sure Calpers had their plan of defense already planned. The Stockton attorney said if they cut pensions, Stockton could not operate as a city. That is a stupid comment. He is probably most concerned about his pension. His attitude sums up the thoughts of too many in the public sector. Stockton will be there long after he retires.

  14. Tough Love Says:

    Responding to Shane Patrick Connolly Says: …

    I’m not Larry, but in response to your question, the retroactive pension increases (via SB400 and similar Local laws) should be completely reversed because CalPERS actively HID the true cost of that HUGE retroactive increase in pensions ,…… nothing but a THEFT of taxpayer wealth.

    In my opinion, those who knew and withheld the actuarial reports with potential cost implications should also be criminally prosecuted.

  15. SeeSaw Says:

    “In my opinion”–that’s just what it is, TL. You are not going to go in and reverse those retroactive pensions, just because someone might have forgotten to read the fine print. Those pension-enhancement formulas passed via SB400 and other laws that followed were all passed by the State Legislature, before they were enacted by the, respective, governmental entities that adopted them. Orange County already tried reneging on pensions it had already granted, and it lost in court, four times. The then Attorney General, Jerry Brown, had written an Amicus Brief, detailing how pension enhancements occurring throughout the course of the history of CalPERS, had always been retroactively adopted. PEPRA has made that practice illegal–when you are offered half a loaf, because you can’t get a whole one–you take it–and shut up.

    The Wall Street scions took down the whole world economically and none of them has ever been prosecuted. You will collapse and die if you plan to hold your breath over a few CalPERS actuaries that withheld pertinent information–in your opinion.

  16. Suk Madik Says:

    Klein is going to reject the city’s plan. He has dropped enough hints already just like he kept dropping hints on the ruling he delivered yesterday.

  17. althink81 Says:

    Judge Klein is quoted as saying: “I’ve concluded the pension could be adjusted.” Emphasis on “adjusted”. Stockton is not expected to withdraw from CalPERS and CalPERS is not expected to cancel Stockton’s plan due to adjustments.

    Well, Stockton once asked for a COLA adjustment for one group of retirees and was rejected by CalPERS. But in a rejection letter CalPERS said “CalPERS” would be pleased to work with the city in these challenging financial times to discuss other possible benefit alternatives, so long as the changes are permitted by law”.

    Well CalPERS has been corrected on the law by Judge Klein (and in Detroit) as to what is legal in bankruptcy. CalPERS has a public service duty to the residents of Stockton to accept the ruling and should immediately confirm to Stockton that they were wrong to not make the COLA change and they now stand ready to work with Stockton on the COLA change and any other “benefit adjustments” to improve the bankruptcy exit plan and help get it approved by the court.

  18. Brody Steele Says:

    These lower court rulings will be overturned, standby.

    Klein will partially approve the city plan under section 558…..

  19. Tough Love Says:

    Quoting SeeSaw …. “PEPRA has made that practice illegal–when you are offered half a loaf, because you can’t get a whole one–you take it–and shut up. ”

    Sorry but reformers are going to “shut up”. And quite frankly, with Judge Klein’s decision in the Stockton Bankruptcy case we have BIG new options. I envision Chicago and LA going Bankrupt within a few years, and with the Klein decision material pension cutbacks (CERTAINLY including the rollback of retroactive increases) will be forthcoming.

    The Public Sector taxpayer-funded pension/benefit “pig-fest” is coming to an end.

  20. Tough Love Says:

    Quoting althink81….”Judge Klein is quoted as saying: “I’ve concluded the pension could be adjusted.” Emphasis on “adjusted”. Stockton is not expected to withdraw from CalPERS and CalPERS is not expected to cancel Stockton’s plan due to adjustments.”

    For the sake of this discussion, let’s “assume” that Stockton’s pensions are reduced by 25%. Now while this doesn’t mean that CalPERS cannot still administer Stockton’s Plan, the ONLY options consistent with the 25% pension reduction are:

    (1) CalPERS makes a 25% (or some other non-level but equivalent) reduction in retiree payouts
    (2) CalPERS doesn’t reduce pensions because Stockton VOLUNTARILY (in addition to meeting the obligations of it’s Bankruptcy Plan) cuts a side deal with CalPERS to pay for the cut pension costs
    (3) CalPERS does NOT get additional funds from Stockton, and pays full benefits to Stockton’s retirees anyway.

    Under scenario #3 I would hope that OTHER CalPERS entities would soundly protest as the implication is that CalPERS assets (and/or earnings thereon) sourced from OTHER entities are being diverted to pay for the 25% portion of Stocktonemployee’s pensions that Stockton is NOT paying for.

    Given the arrogance of CalPERS, it wouldn’t surprise me at all if CalPERS elected #3 and factored the incremental cost (NOT collected from Stockton) into the OTHER entity’s annual pension bills. Hopefully Judge Klein recognizes that arrogance and, should Stockton’s final Reorganization Plan include such a 25% cut, that he clearly lets CalPERS know that it CANNOT pass the non-collected 25% on to OTHER entities.

  21. Mike Says:

    The guilty parties in the 2008 crash are many, and yes, which the poster gleefully omits, some were gov t. It is irrelevant to the Stockton bankruptcy hearings who they are. The problem of the bankruptcy will be addressed. I wonder if there will be another delay(can Stockton withdraw it’s plan to resubmit. ) Won t the other parties want to renegotiate now based on his Calpers ruling? If there was no money except to meet pension obligations, would the city be obligated to pay that and lay off all employees , if Calpers can t be impaired? Isn’t t this fun?

  22. SeeSaw Says:

    The judge did not order Stockton to impair CalPERS. He just stated that Stockton could cut back its pensions, if it decides to do that. According to the Chapter 9 bankruptcy code, he cannot order Stockton to do anything–he can only accept or reject the plan of adjustment.

  23. althink81 Says:

    In a press release CalPERS states: “We disagree with the Judge’s opinion on the issue of pension impairment.” It sounds like CalPERS is challenging the ruling, but this seems clearly outside their roles and responsibilities.

    CalPERS administers pensions, it does not make law. Moving forward, CalPERS job to accept the ruling and move on with their job of administering pensions while adhering to the now clarified law.

    Reasonable people can agree to disagree; but CalPERS must know they are not the decision maker. I assume government unions may wish to appeal, but joining any appeal is clearly outside any reasonable interpretation of CalPERS roles and responsibilities as a state agency. Unless and until something changes, CalPERS only responsibility moving forward is to support the law by helping any city in bankruptcy with pension modifications as necessary.

    As a side note, perhaps CalPERS can now reduce the size of their legal department as a lot of their recent work has been to insist on a mistaken understanding of the law.

  24. SeeSaw Says:

    @althink81, you are taking a lot for granted . There is no clarified law here–things are more muddled than ever. The decision was verbal, and the judge has not made a decision about whether or not he will accept Stockton’s plan of adjustment. The judge has decided to unclarify a law that was already clarified. We now have nothing clarified!

  25. Tough Love Says:

    SeeSaw……. Well the Judge in fact DID make a few things perfectly clear.

    (1) The supremacy Clause in the Federal constitution trumps ALL State law …….. so CA’s “we’re immune” from change holds no water
    (2) CA’s Public Sector pensions have no special rights over other similarly situated creditors in a Bankruptcy
    (3) Public Sector pensions CAN be reduced
    (4) If a City (as part of a Bankruptcy) pulls out of CalPERS
    —- (a) it cannot impose any penalty on the Bankrupt City, and
    —- (b) the CA Law that states that they have a lien on City assets is unenforceable

    CalPERS lost at EVERY turn …. as will the insatiably greedy Public Sector Unions & workers. MATH and REALITY (i.e., No Money) ALWAYS wins in the endgame

  26. SeeSaw Says:

    He made many verbal statements–he made no official decisions– nothing was clarified. I still need an answer to my question–is the Chapter 9 Bankruptcy code not federal law?

  27. larrylittlefield Says:

    “All you commenters who are not CalPERS members seem to continue to gloss over the reality that CalPERS had one-fourth of its entire portfolio wiped out in the recent global, financial disaster which was caused by Wall Street. If that had not happened, we probably would not be talking about unfunded plans.”

    No real wealth was lost. A bubble inflated, deflated, and re-inflated. This has had no effect on the long term funding level of pension plans. The problem is the bubbles were the basis of a lie.

    http://larrylittlefield.wordpress.com/2013/11/29/pensions-the-nature-of-the-lie/

    Dividends. Interest. Rent. These are income, income that can be used to pay benefits. The current inflated asset prices mean nothing in the long run.

  28. Berryessa Chillin' Says:

    SeeSaw, of course Chapter 9 is part of federal law. Why do you even bring up the question? The judge’s rulings clarified something that was previously unclear to some, thanks to CalPERS obfuscation: Chapter 9 of the federal Bankruptcy Code trumps the California Constitution, state law, and state judicial precedents when it comes to bankruptcy.

    Of course, anybody who had read Article 1, Section 8 of the federal Constitution knew that CalPERS’ legal position was tenuous. But I suppose in the land of fruits and nuts, some people just needed a swat in the head to bring them to reality. Holding a JD in this state is nor bar to wishful thinking.

    These clarifications by Judge Klein have had the same effect upon CalPERS’ legal position as Little Boy did upon the city of Hiroshima: there is now a large smoldering ruin with people walking around dazed wondering what the hell happened.

    If Stockton can’t provide a realistic plan to Judge Klein for getting (and staying) out of bankruptcy while leaving these pensions untouched, then the city now knows, despite the smoke-and-mirrors of CalPERS, that it will have to present a plan with cut pensions.

    It will be interesting to see what Stockton comes up with in light of this ruling. I personally would prefer that creditors take bigger hits than pensioners, but the scale of Stockton’s pension funding shortfalls might require sizeable pension cuts. I’m not familiar with the financials of Stockton: but that is why Judge Klein is a bankruptcy judge, not you or me.

  29. Berryessa Chillin' Says:

    *sigh*

    in my last post, second paragraph, last sentence: “…is NOT a bar to wishful thinking.”

  30. Berryessa Chillin' Says:

    SeeSaw, “All you commenters [sic] who are not CalPERS members seem to continue to gloss over the reality that CalPERS had one-fourth of its entire portfolio wiped out in the recent global, financial disaster which was caused by Wall Street.”

    I don’t see that commentators don’t acknowledge that. But there are some other things at play here:

    1) Not all of CalPERS losses were caused by “Wall Street.” CalPERS got into the real estate development business on its own.

    2) CalPERS’ disastrous “see no evil, hear no evil, say no evil” attitude at the time of SB400.

    3) As best as I can tell, at the top of the bubble, the June 2007 CalPERS valuation for state agency funding ratios was 102%. Since the funding ratios of equity-heavy retirement funds should in the range of 80% (bottom of cycle) – 125 % (top of cycle), that tells me that we can tell in retrospect that CalPERS was about 20% underfunded for its liabilities in the best-case model scenario. Instead of ratcheting down pensions from their post-SB400 imprudent benefit levels, CalPERS initially chose to ignore the resulting funding ratio shortfalls and now has a plan to increase contribution rates by 50% to make them up.

    CalPERS is the quintessential “heads I win, tails you lose” organization. Despite some of the other malevolent players in the world of finance, it isn’t a Bambi in the woods. It is a man-eating tiger as much as hedge funds, currency manipulators, robo-signing real estate mortgage brokers, crony capitalists, etc.

  31. Borny Says:

    One judge and not a cite able ruling
    Standby for the real holding
    Just another lower court decision
    This fellow just thinks this way on these facts. It will never hold up…sorry

  32. Bankruptcy Attorney Los Angeles Says:

    Cutting pensions??
    Good luck with that!

  33. SeeSaw Says:

    That’s why I was asking BC. The judge said that Fed law trumps state law. Chapter 9 says that the judge cannot tell the debtor what to do–he can only approve or disapprove. Therefore, I conclude that cannot order Stockton to cut its pensions. He can tell it to go back to the drawing board until it comes back with something else that satisfies him–but he cannot order Stockton to cut its pensions.

  34. Captain Says:

    SeeSaw Says: “All you commenters who are not CalPERS members seem to continue to gloss over the reality that CalPERS had one-fourth of its entire portfolio wiped out in the recent global, financial disaster which was caused by Wall Street.”

    Not true SeeSaw. According to CalPERS only 24% of the CalPERS unfunded liability can be attributed to the market crash. The other 76% can be attributed to retroactive benefits (mostly), inhanced benefits that were approved/promoted by CalPERS, and CalPERS Board of Administrations failure to account for it all, in order to protect the local city budgets – so their members could still recieve raises – increasing the pension cost.

    CalPERS is an arm of the unions, and the organization is as corrupt as they come.

  35. Captain Says:

    SeeSaw Says: The judge said that Fed law trumps state law. Chapter 9 says that the judge cannot tell the debtor what to do–he can only approve or disapprove.

    There you go. Do you not understand the weight of your own words? Why are you so concerned with protecting the opinion of CalPERS Lawyers when the Federal Judge dismissed all their arguments? The Judge can reject the Stockton/CalPERS plan (they are one and the same). So, the judge might not be able to tell Stockton what they can do, but he can certianly tell them what they can’t do. Hopefully he will reject the Stockton plan, which is BS.

  36. SeeSaw Says:

    @ Captain, CalPERS is an arm of the State of CA. There are no unions in the Board Rooms of CalPERS and most of the CalPERS beneficiaries, who belong to the 100+ club, were not union members. You spend a lot of time calling CalPERS corrupt and have not brought forward one piece of evidence. Cite the evidence!! And, I am not referring to the, respective, individuals who were the briber and the bribees in the Villallobos saga.

  37. SeeSaw Says:

    It is not the lawyers’ opinions, it is my opinion as I understand what I have read in the articles of Chapter 9. If you are going to use common sense–stop and think a little yourself. The judge told Stockton that if they decided not to pay CalPERS they could just walk away and could also get out of any buyout plan to leave CalPERS; then to make matters worse he said crazy things like state, agencies and local agencies could be treated differently in this type of situation because the state, agencies had no choice in what pension plan to join, while all the other agencies could have gone anywhere they chose; therefore, the situation of the non-state agencies was different, because they could have joined any other pension plan. It is my opinion, that the Judge must have forgotten his meds that day!

  38. Captain Says:

    SeeSaw: It is you that needs the meds.

    CalPERS is CORRUPT! CalPERS needs to be Disolved!

  39. Captain Says:

    Berryessa Chillin’ Says:

    “I don’t see that commentators don’t acknowledge that. But there are some other things at play here:

    1) Not all of CalPERS losses were caused by “Wall Street.” CalPERS got into the real estate development business on its own.

    2) CalPERS’ disastrous “see no evil, hear no evil, say no evil” attitude at the time of SB400.

    3) As best as I can tell, at the top of the bubble, the June 2007 CalPERS valuation for state agency funding ratios was 102%. Since the funding ratios of equity-heavy retirement funds should in the range of 80% (bottom of cycle) – 125 % (top of cycle), that tells me that we can tell in retrospect that CalPERS was about 20% underfunded for its liabilities in the best-case model scenario. Instead of ratcheting down pensions from their post-SB400 imprudent benefit levels, CalPERS initially chose to ignore the resulting funding ratio shortfalls and now has a plan to increase contribution rates by 50% to make them up.

    CalPERS is the quintessential “heads I win, tails you lose” organization. Despite some of the other malevolent players in the world of finance, it isn’t a Bambi in the woods. It is a man-eating tiger as much as hedge funds, currency manipulators, robo-signing real estate mortgage brokers, crony capitalists, etc.”

    Berryessa Chillin’, I’m a huge fan!

  40. SeeSaw Says:

    Captain, you could have told him that without cutting and pasting his post. And, you continue to declare that CalPERS is corrupt, without putting forth one point of evidence why you think that is so. Perhaps you are the one who needs the meds.

  41. Captain Says:

    Go back and read my previous 100 posts regarding CalPERS, teeter-totter. Or better yet, read the story of SB 400, or the CalPERS execs that have been indicted for corruption and fraud, or the fact that CalPERs conveniently under staffs the department that tracks excessive pension benefits, or even fires those that challenge excessive benefits of CalPERS members. Maybe you care to defend CalPERS outlier smoothing policy of 15 years – an additional ten years above the industry standard, and a clear outlier meant to hide the failures of the giant, lying, Elephant in the room.

    Make no mistake Seesaw – CalPERS is as CORRUPT a state organization as there is. The Judge got it right!

  42. SeeSaw Says:

    Let’s not exaggerate! There is one former Exec under indictment for fraud and accepting bribes and he plead guilty–the briber has been indicted and he was not an executive–he was a Pete Wilson appointee to the Board. His trial has not begun yet. You cannot name one employee that has been fired for challenging member benefits. The smoothing policy was put in by Rod Seeling to make it easier for the, respective, entities to make their payments–just like refinancing a mortgage. I reject your opinion that CalPERS is a corrupt state organization! Bring on the facts, please! (I don’t remember reading that the Judge called CalPERS a corrupt state organization.)

  43. Captain Says:

    And the CORRUPT CalPERS Board of Administration has just gutted Jerry Browns Pension Reform, in 99 different ways, even though Jerry Brown asked them not to do so. Seems a bit disingenuous for CalPERS, claiming to be just an “ARM of the STATE”, to completely ignore the wishes of our Governor. But then again, for those paying attention, it is no surprise that CalPERS and the PUBLIC EMPLOYEE UNIONS do what they want, whenever they want, without fear of reprisals.

    CalPERS is CORRUPT, even trying to write their own laws and use taxpayer contributions to fight the will of both taxpayers and common sense. Thankfully a Federal Judge “clarified” things while giving the very corrupt CalPERS a lesson in federal bankruptcy law.

    CalPERS has no business existing. They have proven, time and again, that they should be relegated to a starring role in an episode of CNBC’s, “AMERICAN GREED“.

  44. SeeSaw Says:

    I don’t know yet what the 99 ways are. Do you? Unless you know, you should hold your opinion until you know what you are talking about. Go ahead and keep calling CalPERS corrupt–the day you draw your last breath you will still be saying it and CalPERS will still be going about its business keeping hundreds of thousands of public retirees sustained.

  45. Brody s Says:

    That is pure nonsense. Calipers, in fact no one, has gutted the states pension reforms. Why post nonsense out here?

  46. Mike Says:

    What is fascinating is Judge Klein’s mention that the origins of the Cal law protecting govt pensions was different than was explained to him. He said the research shows that as a result of the city of New York bankruptcy in the 1970’s the state legislature of Cal decided to protect the pensions to get around a decision by a Federal bankruptcy court, if it ever came to that. That time is now. His opinion is that the action of the legislature is illegal, as they have also passed laws governing how a city prepares for Federal bankruptcy. In his opinion the legislature desired to override Federal bankruptcy law, Assuming his opinion is challenged, it will he interesting to see how another court finds. Calipers must have a plan, but note Governor Brown said when some pension reforms were passed that there were substantive, but the courts might have to resolve. He is going to get reelected, obviously.

  47. Tough Love Says:

    Quoting SeeSaw ,,, “I don’t know yet what the 99 ways are. Do you?”

    Here they are ….. quite amazing, and disgusting !
    ….. but I’m quite sure you’ll find them all reasonable and appropriate.

  48. Tough Love Says:

    Follow-up …… not only should NOT ONE of the 99 categories be included as “pensionable compensation”, but perhaps 90+ of the 99 categories are complete nonsense, clearly a NECESSARY part of the specific job to which they apply, and are NOT deserving of extra pay.

    Simply another example of how CA’s taxpayer-betraying Legislature (BOUGHT-OFF with campaign contributions and elections support) acquiesces to the demands and desires of their Public Sector Union masters.

  49. SeeSaw Says:

    Thanks TL. I haven’t had time to digest but it all looks pretty dry and boring–more like 99 ways to describe one subject–compensation.

  50. SeeSaw Says:

    Mike, you are putting a lot of words in the judge’s mouth that I don’t see that he said. A mention about actions taken by the Legislature to shore up its own pension statutes after seeing the experience of New York in its own bankruptcy would not be unusual. He just mentioned that the State of CA had added something to its own statutes in the 1970’s regarding pensions–he didn’t say whatever it did was illegal.

  51. Mike Says:

    Thank-you. I will leave that up to the courts to decide, Ms.
    What will happen now is that the numbers supporting Stockton’s plan will be scrutinized. We will.see how he rules, yes or no. Isn’t this fascinating to see how the law works?

  52. Tough Love Says:

    Here just one example of the nonsense on the above list of 99 way Public Sector workers can “spike” their pay (and hence their pension):

    ” Government Agency Required Licenses –
    Compensation to employees receiving and maintaining a license required by government or regulatory agencies to perform their duties. ”

    So …… the license is “REQUIRED by government or regulatory agencies to perform their duties.” (i.e., no license means no job) ……. yet they get paid EXTRA for having that REQUIRED license.

    What a giant Taxpayer ripoff !

  53. RSpringbok Says:

    Re 99 extra pay items: I have no data about all agency pay structures but there is a scenario where these premium pay items make sense. Smithville hires a police ‘copter pilot but they have no pilot job classification. Instead they use police officer base pay and add a pilot premium on top of that to bring the total salary up to what a pilot should be paid. In that scenario the premium pay should be pensionable and is not a “spike.”

  54. Tough Love Says:

    RSpringbk, I agree with your example, but I’d bet there are financially more attractive options wherein the helicopter pilot is NOT also a sworn Police Officer, but a contractor or non-officer Pilot.

  55. SDouglas47 Says:

    ” So …… the license is “REQUIRED by government or regulatory agencies to perform their duties.” (i.e., no license means no job) ……. yet they get paid EXTRA for having that REQUIRED license.

    What a giant Taxpayer ripoff !”
    …………..
    LOL! Once again proving you have NO IDEA what you’re talking about.

    (i.e., no license means no job)
    ……………
    Maintenance workers who perform *specialized* duties such as spraying pesticides and herbicides must test and be certified regularly, and may be paid a premium for having that license and performing that *duty*. Without that license, they would NOT lose their job. Someone else would perform that specialized duty and receive the premium pay. The license is required for safety and environmental reasons when dealing with very large quantities of toxic materials, but not EVERY maintenance worker is required to perform this specific duty.

    For years, I held a commercial drivers license. My position, or *job* required only a California class “C” license, but we had some trucks over 26,000 GVW. Several of us voluntarily obtained a class “B” commercial license to legally operate those trucks. It was a requirement for ONE “duty”, not a “job” requirement. And yes, I was paid a premium for that.
    …………….
    TL…. often mistaken, never in doubt

    “I’d bet there are financially more attractive options”????

    Your “opinion” is notoriously fallible.

  56. SDouglas47 Says:

    RSpringbok,

    Correct. Or a police officer who has a K9 “partner” is paid $135 per month for boarding and training his canine.

    ” What a giant Taxpayer ripoff !” ?????

    Catch a clue.

  57. SeeSaw Says:

    TL, how many police officers do you think would want to fly on a police copter with an independent contractor? I, like many others in So. CA, have not gotten over the Metrolink commuter train accident that killed the engineer and almost 30 passengers. The engineer was texting while he was driving the train and he failed to stop at the red light in front of an oncoming freight train. I was aghast to learn that the Metrolink was using independent contractors to drive their trains–not employees of Metrolink–let alone to learn that the lives of the passengers depended on one human being stopping at a red light. Forget it, TL. Protecting lives trumps saving money in my book. And, I would bet you that hiring a private pilot would cost the entity several times more than using staff.

  58. Tough Love Says:

    SeeSaw, What makes you believe a licensed pilot working as a contractor (or as a non-sworn police officer) is less qualified as a Pilot ?

  59. Captain Says:

    SDouglas47 Says: “For years, I held a commercial drivers license. My position, or *job* required only a California class “C” license, but we had some trucks over 26,000 GVW. Several of us voluntarily obtained a class “B” commercial license to legally operate those trucks. It was a requirement for ONE “duty”, not a “job” requirement. And yes, I was paid a premium for that.”

    …and why do you think, even though you were already paid for that, that it should increse your pension? Shouldn’t the additional pay be considered fair compensation, without the pension padding? Should you be compensated all year even though you probably only used the class “B” license assignment on occassion?

    Why do you think every additional pay-perk you receive should be pensionable? Is it ridiculous to think that the additional pay is the perk? Or does it have to have a pension enhancer attatched to make you happy?

  60. Captain Says:

    SDouglas47 Says: “RSpringbok,

    Correct. Or a police officer who has a K9 “partner” is paid $135 per month for boarding and training his canine.

    ” What a giant Taxpayer ripoff !” ?????

    Catch a clue.”

    You need to get a clue, Douglas. The city I live in is paying the K-9 officer over 20K per year, and those dollars are pensionable. And the city pays for the food and vet bills.

  61. SeeSaw Says:

    I didn’t say anything about the qualifications of any licensed pilot, TL. I said that I would bet the hiring of an independent contractor to fly the police copter would probably be several times more expensive than using staff.

  62. Captain Says:

    SeeSaw Says: “I didn’t say anything about the qualifications of any licensed pilot, TL. I said that I would bet the hiring of an independent contractor to fly the police copter would probably be several times more expensive than using staff.”.

    Based on what? Are you jgoing to continue to make claims you can’t support, while continuing to claim you’re just a little old lady (Dave Low)? Anything that inflates pensions are A-OK with you, Right. Doesn’t matter that the pensions plans are driving cities toward bankruptcy, does it?

  63. SDouglas47 Says:

    Oh, Captain,

    I see the error of my ways. I am so unworthy. I should fall on my proverbial sword.

    Until then…in many job categories there are progressive steps. Maintenance Technician….Maintenance Worker I……Maintenance Worker II……Maintenance Leaderworker….Maintenance Supervisor…..ad nauseum.

    Each step requires prerequisite experience and written/oral testing. Think of the class B license as Maintenance Worker II.5…..more than a II…less than a lead worker. It requires more training and responsibility than Maintenance Worker II, so it pays a little more. And it’s pensionable for the same reason a Leadworker pension is higher than Maintenance Worker II……….

    ” you probably only used the class “B” license assignment on occassion?”

    Where do you clowns even come up with this crap?

    In our particular case, with a seven man crew, two workers typically drove the big truck almost every day. Two additional workers were licensed and drove as needed. I personally drove an average of one or two days a month. And I got just as much as the guy who drove every day. I guess life just ain’t fair. It’s possible the boss was happy to have a driver available when needed, and didn’t want to do the paperwork to pay extra for 12 hours in March and 87 hours in April.

    Maybe they could use a Captain to micromanage every facet of the operation.

  64. SDouglas47 Says:

    I don’t know what city you live in, Captain, but my understanding is CHP K9 officers get $156 a month which is pensionable, and the state pays food and vet bill, which is not pensionable.

  65. SeeSaw Says:

    Base on my gut feeling, Captain. I made no specific claim. Is that like what you do when you claim that I, someone you have never me, is a crook, and CalPERS is crooked? Its just in your gut–right?
    David Low is a union leader–I have never ever been in the workings of a union organization–I have never met him, but I have seen him speak on a CalPERS panel of guests at the California Dialogue. He is a male; I am a female–we are each of a different ethnicity. He is about 30 years younger than I am. But you have decided to peg me as David Low in disguise??? Don’t look out your window, Captain–the white coats could be on their way.

  66. Mike Says:

    Does the dog collect a pension as well?

  67. Tough Love Says:

    Mike, That’s not as funny as you think (the Gov’t sector BS at taxpayer expense never ends).

    See this ……. http://triblive.com/news/adminpage/6919151-74/care-harris-dog#axzz3FcK7h8go

    Earth to cops …. if you take a retired police dog into your home AFTER it’s “career” has ended, it’s PET … and YOU, not the Taxpayers should pay it’s bills.

  68. Brody s Says:

    lol captain
    U missed that point by a mile!!!

    The opinion even when final has no precidential value! But u don’t get that , do ya! One judges opinion from a lower court that won’t even be law of this case in 6 months!

    Enjoy your denial!

  69. Captain Says:

    Pittsburgh councilwoman wants to pay costs for retired police dogs

    I thought you were joking until I read the article, TL.

    I’m a dog lover but this is ridiculous, especially considering the precarious nature of this regions state capitol/unfunded pension liability. Isn’t Harrisburg on the verge of bankruptcy?

  70. Captain Says:

    SDouglas47 Says: “.I don’t know what city you live in, Captain, but my understanding is CHP K9 officers get $156 a month which is pensionable, and the state pays food and vet bill, which is not pensionable.”

    And I told you the city I live in is paying the K-9 officer over 20K per year, and those dollars are pensionable. And the city pays for the food and vet bills. Just because you don’t see what I see see doesn’t mean it isn’t happening.

    Who makes these rules pensionable – CalPERS. Actually they’re already pensionable for everyone employed prior to 1-1-2013. Now the crooks at CalPERS are working on destroying PEPRA to the benefit of people that aren’t even working for the unions, and haven’t even applied.

    If CalPers said you can’t do that it wouldn’t happen. But instead of honoring PEPRA they are trying to destroy it, to the chagrin of Jerry Brown, and the detriment of all california taxpayers.

    Unfortunately, CalPERS is too busy looking for ways, 99 ways, to allow for increased pensions. That’s what these crooks do!

  71. Captain Says:

    Brody s Says: “lol captain
    U missed that point by a mile!!! … Enjoy your denial!”

    Just because I don’t agree with your statement doesn’t mean I missed anything. I ‘ll leave it at that.

  72. SDouglas47 Says:

    “If CalPers said you can’t do that it wouldn’t happen.”

    CalPERS didn’t make that decision, the legislature did. CalPERS *interpreted* the legislation, and so far, I haven’t seen the legislature challenge that interpretation.
    ……………….
    ” And the CORRUPT CalPERS Board of Administration has just gutted Jerry Browns Pension Reform, in 99 different ways, even though Jerry Brown asked them not to do so.”

    Governor Brown objected to ONE of the pensionable items, not 99. And if it is legally mandated, like all the others, Brown does not have the authority to deny it.

    IF……a court determines CalPERS interpretation is incorrect, OR the legislature passes, and Governor Brown signs a law eliminating some or all these items as pensionable, CalPERS will comply with that law.

  73. SDouglas47 Says:

    ” And I told you the city I live in is paying the K-9 officer over 20K per year, and those dollars are pensionable. And the city pays for the food and vet bills. Just because you don’t see what I see see doesn’t mean it isn’t happening.”

    I didn’t challenge your claim. I HAVE tried to caution many times that some of these examples are outliers, not typical. There are thousands of public entities, with wide ranging rules on what may be pensionable.

    EVEN IF

    CalPERS *allows* some items, the local government may, by contract, disallow it for their employees.

    EVEN IF

    CalPERS (complying with legislation) *allows* 3% @ 50 for safety workers, the local entity may elect a lesser formula.

    EVEN IF

    Safety workers in larger or more affluent cities average $100,000+ a year in salary and/or pensions, that does not necessarily mean it is typical statewide.

  74. SeeSaw Says:

    D47, watch out–your are using common sense here–the the haters don’t like common sense.

    My former employer does not allow full-time employees to purchase CalPERS credit for time that they might have spent in the entity as a part-timer. That is terribly unfair to those particular employees! (It could be done during my tenure and I was able to purchase my own credit of 4.5 years to cover the 8 years that I was not covered by CalPERS as a part-timer.)

    There are approximately 4,000 public entities in CA probably following 4,000 different policies.

    My former employer now has part-timers earning CalPERS credit and part-timers who have never been and never will be put on CalPERS. They are all working together for this entity at the same time. The part-timers are not getting step raises at all. There is absolutely nothing fair about that–one time, a manager told one of my colleagues who was complaining to him about unfairness and received the response, “Well Kathy, did anyone ever tell you that life is fair?”

  75. Captain Says:

    SDouglas47 Says:

    ” And I told you the city I live in is paying the K-9 officer over 20K per year, and those dollars are pensionable. And the city pays for the food and vet bills. Just because you don’t see what I see see doesn’t mean it isn’t happening.”

    I didn’t challenge your claim. I HAVE tried to caution many times that some of these examples are outliers, not typical. There are thousands of public entities, with wide ranging rules on what may be pensionable.

    EVEN IF

    CalPERS *allows* some items, the local government may, by contract, disallow it for their employees.

    EVEN IF

    CalPERS (complying with legislation) *allows* 3% @ 50 for safety workers, the local entity may elect a lesser formula.

    EVEN IF

    Safety workers in larger or more affluent cities average $100,000+ a year in salary and/or pensions, that does not necessarily mean it is typical statewide.”

    – – – – – – – — — — — — – – – – – – – – –

    – Douglas, you can “EVEN IF” all you want. The truth is none of these pension enhancements would even exist if it weren’t for CORRUPT CALPERS making them available. We have PEPRA, thanks to Governor Jerry Brown (nice first step), which supposedly would reduce PENSION benefits for people hired after 1-1-2013. Now CalPERS, or their CORRUPT BOARD of ADMINISTRATION, has gutted Jerry Brown’s pension reform.

    Maybe you can tell me, honestly, how that makes sense. And keep in mind that CalPERS is only about 75% funded. When your 75% funded the 7.5% rate of return means nothing because it is essentially a failure that only adds to the unfunded liability.

    CalPERS needs to earn a 7.5% rate of return (based on 100% funding – which they don’t have) plus 1% to cover their cost of doing business (8.5%). After almost 3.5 months of their fiscal year they’re in the red – and that means they’re in negative numbers. It will PROBABLY be a tough FY for CalPERS, and that means they will need to raise taxpayer/city rates even beyond the currently ridiculous rates they are already charging their broke customers because CalPERS has been driving them into BANKRUPTCY, for 14 years and counting. CalPERS is currently projecting up to 50% rate increases for most of their plans – and that is insane!

    You should expect CalPERS clients, which include school districts, to start challenging CalPERS worth very soon.

    The CalPERS BOARD of ADMINISTRATION is CORRUPT. Jerry Brown needs to expunge both CalPERS Management & Their Board/CEO. The Culture in this CORRUPT Organization is BEYOND repair.

  76. SeeSaw Says:

    CalPERS cannot pass laws, Captain. The State passes laws. Its true that many public entities never adopted the 3% at 50 plan for pubic safety or the 3% at 60 for miscellaneous workers. But the fact is, the 3% formula no longer exists in CA, under PEPRA, except for the workers who were currently vested in that benefit. Its not true that CalPERS gutted PEPRA. When you insist in getting all your information from sites that are hostile to the public sector, you will never get all the true facts. CalPERS has existed for 80+ years and CalSTRS has existed for 100 years. Both will still be here long after you and I are gone. You might has well get a life.

  77. SDouglas47 Says:

    CalPERS did not “make them available”. The legislature did. CalPERS gutted nothing. These pay enhancements for special skills were previous practice and never addressed by PEPRA.

    PEPRA doesn’t ” supposedly” reduce PENSION benefits for people hired after 1-1-2013, it ABSOLUTELY reduces their benefits, AND increases the cost to employees.

    “99 ways” is a red herring, a non-story, and a dead horse.

    EVEN IF

    You want to keep beating it.

  78. Tough Love Says:

    SDouglas47, The wording in PEPRA with respect to pension “spiking” was a set-up to accomplish NOTHING …. because PEPRA used the words “normal pay”.

    There isn’t a Private Sector Plan in the country that would use those words in the definition of “pensionable compensation” simply BECAUSE it is NOT sufficiently clear.exactly what that meant ….. and I believe the legislators INTENTIONALLY left it UNCLEAR just so that CalPERS could do exactly what it ultimately did …. make the anti-spiking provisions of PEPRA meaningless.

  79. SDouglas47 Says:

    California Government Code Section 7522.34. (a)

    “Pensionable compensation” of a new member of any public retirement system means the normal monthly rate of pay or base pay of the member paid in cash to similarly situated members of the same group or class of employment for services rendered on a full-time basis during normal working hours, pursuant to publicly available pay schedules, subject to the limitations of subdivision (c).”
    ……………….
    subdivision (c) specifies 13 types of pay which are NOT pensionable, e.g. , ad hoc payments, overtime, vacation cash outs, etc.

    ………………..
    A) The anti-spiking provisions are hardly meaningless. By eliminating overtime, vacation cash-outs, they eliminated what most (non-zealot) people consider “spiking”, like the well publicized cases where pension income is higher than final pay.

    And, 2) How impressive that, on such short notice, you were able to research EVERY “Private Sector Plan in the country”. By ” impressive”, of course, I mean unbelievable.

    Literally, unbelievable.

  80. Tough Love Says:

    SDouglas47, You’re just reinforcing what I said above.

    In the PUBLIC Sector, under the rather vague umbrella of “normal monthly rate of pay or base pay …” it seems that “pensionable compensation” is largely INCLUSIVE of lots of non-listed elements BECAUSE it SPECIFICALLY lists 13 exclusions.

    That’s is ass-backwards, I I believe it’s done that way to allow the routine spiking BS that is so routine.

    “Pensionable Compensation” should be specifically defined by listing the ONLY things included (NOT the other way around) … as it is ALWAYS defined in Private Sector Plans.

  81. SDouglas47 Says:

    One of the usual complaints about public sector unions is that there is no incentive to put forth any more than minimum effort, since all workers are paid the same. Now we learn there is a means whereby some workers can earn more by learning new skills, taking more responsibility, or acquiring certain helpful licenses.
    Do you really see no difference between one who has, over a period of many years, earned a slightly higher “normal monthly rate of pay or base pay” due to a specialized skill and/or license, as opposed to one who spikes his pension by selling back vacation hours in his final year?

    Perhaps its not a assault against the taxpayer, but a conspiracy against TL personally.

    ” I I believe it’s done that way to allow the routine spiking BS that is so routine.”

    Again, your *opinion*

  82. SeeSaw Says:

    Selling back vacation has no connection with spiking a pension. It is simply a cash out of what is left, unused, at the time of retirement. It is not added to the pension calculation. My entity was very smart about vacation accumulation. There was a cap of twice what the, respective employee could accumulate. In my case, I accumulated five weeks per year, so I could bank no more than 400 hours. I had to take leave once the limit was reached or there would be no more accumulation. My cash out at retirement was less than $20,000 and most went to the IRS in the form of income taxes.

    The situation with the prison guards is unique, and completely understandable in view of the circumstances in that particular area of Corrections. There is no, “one size fits all”, when it comes to benefits, TL. You can say, “Should” until you are blue in the face. Nothing occurs without the laws being passed. The guards might amass several hundred thousands of dollars in unused vacation accumulation, but just like all the other public workers in CalPERS, it will not be added to their pension calculations. There is a cap now on pensionable income in CA, and a new employee starts out with the pension formula than was in effect in the 1970’s–a new employee must work until age 67 to get full retirement benefits. Don’t kid yourself–PEPRA is a major step forward in pension reform. In your little world, you fantasize being the “Emperor” that decides, on your own, what you are and what you are not going to give to the little people.

  83. SDouglas47 Says:

    Selling back vacation in some county plans does affect retirement, SeeSaw. That’s how we got many of the horror stories.

    http://www.foxnews.com/politics/2014/02/20/california-sheriff-pensions/

    But not in CalPERS, and no longer allowed in county plans.

  84. SeeSaw Says:

    Yes, I agree, SD47. The haters won’t admit that CalPERS is way ahead of the game, when it comes to putting a halt to pension spiking.

  85. Tough Love Says:

    Quoting Seesaw … “Don’t kid yourself–PEPRA is a major step forward in pension reform. ”

    Since almost ALL of PEPRA applies only to NEW (not CURRENT) workers, yes, it is a major step for THAT (very small) segment of the Public Sector employee population impacted by it … NEW employees. But is will have VERY VERY VERY little financial impact for MANY MANY MANY years.

    What was necessary was to have made the PEPRA changes apply to the FUTURE Service of all CURRENT workers. But no, not in CA where the legislature in “in the Union’s pocket”.

  86. SeeSaw Says:

    PEPRA is a statute, TL. To have it do what you want to current workers would take a CA Constitutional Amendment.

  87. Tough Love Says:

    Quoting SeeSaw …”The haters won’t admit that CalPERS is way ahead of the game, when it comes to putting a halt to pension spiking.”

    Readers …. SeeSaw is delusional. Just read for yourselves the list of 99 ways to spike ones pension (pasted into my comment above, time-stamped October 4, 2014 at 11:37 pm).

  88. SDouglas47 Says:

    99 types of premium, regular, base pay.

    It’s a dead horse. You can keep beating it, it still won’t move.

  89. Tough Love Says:

    SDouglas, I’ve read that list of 999 Ways to Spike one’s pension.

    While a small # may be legitimate, AT LEAST 75% (and more likely 90+% upon closer examination) are ridiculous and simply part of the job … with ZERO justification for extra pay (and ESPECIALLY for inclusion in “pensionable compensation” for pension calculation purposes).

    Just another of the MANY MANY MANY ways that Public Sector Unions & workers (enabled by legislators BOUGHT-OFF with Union campaign contributions and election support) rip-off the Taxpayers.

  90. Tough Love Says:

    That’s funny, Freudian slip?

    The 999 in my above comment was supposed to be 99.

  91. Captain Says:

    Tough Love Says:
    October 2, 2014 at 8:56 pm
    “Responding to Shane Patrick Connolly Says: …

    I’m not Larry, but in response to your question, the retroactive pension increases (via SB400 and similar Local laws) should be completely reversed because CalPERS actively HID the true cost of that HUGE retroactive increase in pensions ,…… nothing but a THEFT of taxpayer wealth.

    In my opinion, those who knew and withheld the actuarial reports with potential cost implications should also be criminally prosecuted.”

    – Yes, those who knew and withheld the actuarial reports with potential cost implications should also be criminally prosecuted. I agree 100 percent.

  92. Bordy s Says:

    T love
    Lol
    Your nonsense about fraud is a Walter Mitty pipe dream
    What evidence of specific intent do o point to?
    Lmao

  93. Tough Love Says:

    Bordy s,

    While I’m sure care is taken to not discuss such horse-trading overtly where others can hear, one would have to be brain-dead not to see the Union/Politician trading of campaign contributions and election support for favorable votes on pay, pensions, and benefits.

    Enjoy your current advantage as one riding this pension/benefit “pig-fest”. Material (necessary and just) reductions are on the horizon.

  94. Captain Says:

    Tough Love Says: “while I’m sure care is taken to not discuss such horse-trading overtly where others can hear, one would have to be brain-dead not to see the Union/Politician trading of campaign contributions and election support for favorable votes on pay, pensions, and benefits.”

    TL, I was at a council meting regarding one public employee bargaining units contract. The unions packed the room. I was amazed by the number of union representives that spoke at the podium. I was even more amazed by tboth their Tone & Outright Arrogance. Every single union rep (at least 15 of them with another 45 or so supporters) addressed the Mayor and Council by stating who they “ARE” (their UNION Affilition), how many members they control, and that they’re all watching the vote very closely. The intimidation tactics were off the charts.

  95. Tough Love Says:

    Follow-up response to Brody S’s above comment to me ….

    The following is a well-on-point comment from another article (http://www.vibvallejo.com/editorial/vallejo-cops-sue-city-big-payout-could-bankrupt-vallejo/) addressing the Public Sector Unions’ BUYING of our elected officials:

    “Final Thought
    While the ethical questions surrounding the modification of promised benefits are not entirely without merit (Nobody really wants to do that.), there is also the question of how unfunded benefits got to be so absolutely positively huge as to swallow municipal budgets whole. The outright purchase of elected officials by any special interest group; union, corporate or otherwise is so broadly and systemically prevalent in American politics as to be unremarkable…which in itself is a sad statement on governance and democracy in this country. Buy the people who approve your wages and benefits and they will represent your interests rather than those they are elected to represent. And with a bigger pool of money to draw from you can grow a fatter war chest to buy more people in positions of influence who will return the favor by fattening your coffers and so on and so on yadda yadda yadda in a perpetual cycle of self enrichment protecting a selective gold plated socialism for the privileged few at the expense of the many. (Most of you reading this qualify as the many.) But this is old news and if you don’t get it, you’re not paying attention.”

    —————————————————————————-
    The Union/Politician COLLUSION is indeed the ROOT CAUSE of the granting of grossly excessive Public Sector pensions & benefits….. and THEREBY the extremely high funding requirements.

    The appropriate response from Taxpayers is simply to REFUSE to pay for the 50%-75% share of those “promises” that would NOT have been made in the absence of that collusion.

  96. Jenna Peterson Says:

    When changes occur in retirement benefits they should not be done retroactively. This applies to both increases or cuts. I am a PERS member as I worked for the county schools. I was not allowed to NOT be a union member at a cost of $23 a month, it is mandatory, but to have a vote I was also required to pay an additional $3 per month to join our local. I receive $600 per month as my pension and believe I am entitled to this. However, if changes need to be made to keep the pension funded they should be applied to all current workers as well as new employees. Giving retirees a retroactive increase is as ridiculous as is cutting payments and/or reqiring retirees to pay back overcompensation. We are employees that must comply with our employers’ decisions WHILE EMPLOYED. This often means combining jobs to reduce employees. We have the choice; stay or leave. But once we are no longer working we should not be rewarded or penalized for changes to the system.

    Not all union members are greedy or lack the common sense to see that the fund has to be managed so that all will receive the benefit they earned. But we have very little power at the local level. And none once retired. I, too, have seen spiking and the resulting actions by employees to max retirement benefits. But these can be addressed and applied to current and future workers to stop any inequities. Going back creates enormous problems and costs which affect everyone.

    Finally, many retirees are no longer able to work and have created a monthly budget partially based on their income retirement. Leave it alone and focus on going forward. And no one deserves an increase either! Use those funds to enhance current workers or to restructure the current plan.

    I would appreciate comments from other union members, past or present.

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