Is Gov. Brown disinterested in pension reform?

Is Gov. Brown disinterested in pension reform?

Brown JerryLater today, the governing board of the California Public Employees’ Retirement System is expected to pass rules giving state employees 99 ways to spike their “pensionable pay.” Gov. Jerry Brown only objected to one of the 99 bonuses.

This is the same governor who billed his 2012 pension reform legislation as a game changer. Baloney.

Supporting an approach that the Sac Bee editorial page likens to sanctioning “spiking by another name” is a farce. So is endorsing CalPERS’ theory that anti-spiking provisions of the state legislation have to be collectively bargained at the individual agency level, as board member J.J. Jelincic said Tuesday.

But Brown’s heart has never been in the reform effort, despite all his rhetorical flourishes and his credit-taking.

Two more examples of fake reform

The fake quality of Brown’s reform spirit has shown itself repeatedly.

The state Public Employment Relations Board, controlled by Brown appointees, has tried to sandbag local pension reforms approved in landslides by voters in San Jose and San Diego.

But worst of all is how — when it came to teachers — the governor didn’t just turn his back on his 2012 promise to have public employees share equally with taxpayers the cost of their pensions; instead, Jerry Brown OK’d a CalSTRS funding change that socked taxpayers even harder while insulating teachers from the pain of the fix. Under Brown’s plan …

… eventually there will $5 billion more a year in state spending to cover CalSTRS’ unfunded liabilities. 70 percent of that will come from districts (and thus indirectly from the state); 20 percent will come directly from the state; and 10 percent will come from teachers.

So much for a 50-50 split of pension funding costs. That’s from Cal Watchdog.

A genius at PR, not governance

When the history of Jerry Brown’s return to the governor’s office is written, the establishment probably will promote the narrative that he was a genius. I think that narrative is built almost entirely on the fact that Prop. 25 makes it easier to pass state budgets and that Silicon Valley — without Brown’s help — is such an amazing economic engine.

The California that I see has the nation’s highest-poverty rate; is on track to have the nation’s biggest public works boondoggle; and operates a public school system more interested in helping adult employees than students.

If this is a success story, the definition of success is … evolving.

69 comments

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  1. Ronald Stein
    Ronald Stein 20 August, 2014, 08:27

    It’s like walking across the street within the guidelines of the crosswalk and getting hit by a truck, you’re RIGHT but DEAD RIGHT.

    Legally, we may be obligated to pay those DEFINED benefit pension plans, but their unsustainability is killing the budget and discouraging new job creation as the entrepreneurs’’ taxes and fees are contributing to paying for those defined entitlements that are not available in the private sector.

    “Defined benefit” programs are lucrative to the recipients, but unsustainable as they are funded by investments that do not get defined rates of returns. Currently there are more than 12,000 people receiving pensions over $100,000 from CALPERS. When the CALPERS investments perform poorly, the consumer picks up the tab for those defined guaranteed pensions.

    With the economy and jobs in the doldrums, entrepreneurs should be incentivized to get the job market moving, not dis-incentivized to pay more taxes to fund more government and more defined compensation and benefits to retiring government workers.

    The uneven playing field continues to prosper while new job creation suffers. Everyone needs to be on the same playing field with defined CONTRIBUTIONS only, which places the entire risk of loss on investments on employees and delivers no guaranteed benefit.

    Reply this comment
  2. S Moderation Douglas
    S Moderation Douglas 20 August, 2014, 09:44

    “So much for a 50-50 split of pension funding costs. That’s from Cal Watchdog.”

    Of course that’s from Cal Watchdog. Keep repeating it,even if it’s incorrect.

    It’s 50-50 split of NORMAL annual costs. Always has been.

    Reply this comment
  3. S Moderation Douglas
    S Moderation Douglas 20 August, 2014, 09:50

    “Gov. Jerry Brown only objected to one of the 99 bonuses.”

    Not “bonuses”.

    For about fourteen years, I was paid five percent extra for obtaining and using a Commercial Driver License. It was not required by the job description agreement, but was useful to my employer.

    It was part of my “regular pay” and was included in my pension calculation.

    Not spiking.

    Reply this comment
  4. Chris Reed
    Chris Reed Author 20 August, 2014, 10:39

    SMD:

    This is from Brown’s pension reform blueprint in 2011:

    1. Equal Sharing of Pension Costs: All Employees and Employers
    While many public employees make some contribution to their retirement – state employees contribute at least 8 percent of their salaries – some make none. Their employers pay the full amount of the annual cost of their pension benefits. The funding of annual normal pension costs should be shared equally by employees and employers.
    My plan will require that all new and current employees transition to a contribution level of at least 50 percent of the annual cost of their pension benefits. Given the different levels of employee contributions, the move to a contribution level of at least 50 percent will be phased in at a pace that takes into account current contribution levels, current contracts and the collective bargaining process.
    Regardless of pacing, this change delivers real near-term savings to public employers, who will see their share of annual employee pension costs decline.

    Reply this comment
    • bob
      bob 20 August, 2014, 12:30

      My plan will require that all new and current employees transition to a contribution level of at least 50 percent of the annual cost of their pension benefits.

      Ok, it’s better than what exists now but how is this fair?

      In the private sector you are lucky to get a 3% 401k match so the employee pays 97% of his/her retirement savings if he/she is lucky.

      Reply this comment
      • S Moderation Douglas
        S Moderation Douglas 20 August, 2014, 17:53

        ” In the private sector you are lucky to get a 3% 401k match so the employee pays 97% of his/her retirement savings if he/she is lucky.”

        It doesn’t work that way. If the employer pays a 3% “match”, he is “matching” the employees 3%. Each pays 50%. (Not 97%). My wife, I think, was somewhat typical. She was allowed to contribute up to 6%, and her employer matched 3% maximum, ending with a 66/33 split.

        Reply this comment
        • bob
          bob 21 August, 2014, 11:07

          Wrong. It does not work that way at all. The employer matches the percentage of what you contribute. I know because I do this every year.

          At my company we have a 3% match. Last year I contributed the max of 23,000 (the max plus the catch up). My employer contributed 690 (3% of 23,000).

          Reply this comment
          • S Moderation Douglas
            S Moderation Douglas 21 August, 2014, 19:57

            Bob, I sure hope you don’t do your own taxes.

            It just doesn’t work that way.

            At least not for normal people.

          • SkippingDog
            SkippingDog 22 August, 2014, 10:27

            Bob’s employer seems to be hustling him. Most employers match a like percentage of pay, not a percentage of your contribution. Like so many others, old Bob has been screwed by his boss in the name of “freedom.”

          • S Moderation Douglas
            S Moderation Douglas 22 August, 2014, 15:54

            And “capitalism”.

            Not that there’s anything wrong with that.

    • S Moderation Douglas
      S Moderation Douglas 20 August, 2014, 19:11

      Its not rocket surgery:

      ” The funding of annual normal pension costs should be shared equally by employees and employers.”

      “Normal Cost
      The annual cost of service accrual for the upcoming fiscal year for active employees. The normal cost should be viewed as the long term contribution rate.”

      And it’s not semantics. Normal cost does not include costs for unfunded liability. Never did.

      Reply this comment
  5. Richard Rider
    Richard Rider 20 August, 2014, 11:35

    S Moderation Douglas — “normal annual [pension] costs” is all the employees owe? Sure, and who decides what it “normal”? Public employees, and their beholden contrators (actuaries, primarily).

    So, by assuming unrealistically high returns, using outdated mortality tables understating the longevity of retirees, ignoring pension spiking retroactive effects and other gimmicks, the “normal” cost is FAR less that what will be needed. And it’s the TAXPAYERS, not the public employees, who are legally on the hook for ONE HUNDRED PERCENT OF THE SHORTFALL.

    Yeah, sounds fair to any objective government employee.

    Reply this comment
  6. Richard Rider
    Richard Rider 20 August, 2014, 11:39

    Here’s a common legal pension spiking example. Firefighters spend most of their careers contributing to their pension (actually a relatively recent employee obligation) based on their firefighter salary. But towards the end of their careers they are promoted to “captain” — the guy in charge of the 3-4 man fire truck. Big whoop.

    But now the pension will be based on the “captain” salary, though little has been contributed at the higher salary rate. Then the taxpayer gets the bill for the shortfall.

    Reply this comment
    • SeeSaw
      SeeSaw 20 August, 2014, 12:36

      The pension is calculated on the highest full-year’s salary. Its been that way for a long time. Nothing new. Promotions should be given because the worker has earned it–not because retirement is just around the corner. In my 40 years, I saw workers get promotions that were, in my view, due to nepotism and cronyism–never have I ever seen one get a promotion because he/she was getting ready to retire.

      Reply this comment
      • Donkey
        Donkey 20 August, 2014, 19:01

        The truth is that there is nothing right about the RAGWUS pension scheme SeeSaw. 🙂

        Reply this comment
        • S Moderation Douglas
          S Moderation Douglas 20 August, 2014, 19:13

          Nothing right?

          We LOOK marvelous!!!

          Reply this comment
        • S Moderation Douglas
          S Moderation Douglas 20 August, 2014, 19:14

          What the heck is this RAGWUS???

          Reply this comment
          • NTHEOC
            NTHEOC 20 August, 2014, 19:53

            What the heck is this RAGWUS???
            ———————————-
            It is some sort of acronym having to do with Robert Rizzo that Donkey made up pertaining to any and all types of public employees. Including his own son who works for the Feds…..

          • Donkey
            Donkey 20 August, 2014, 20:55

            It’s all over the net S&MD, but you know that already!! 🙂

          • S Moderation Douglas
            S Moderation Douglas 21 August, 2014, 10:54

            “Donkey” is all over the net, and he usually brings his RAG WUS with him, otherwise, it’s non existent.

          • Donkey
            Donkey 21 August, 2014, 14:59

            Can’t hide from the truth S&MD. 🙂

          • S Moderation Douglas
            S Moderation Douglas 22 August, 2014, 11:34

            Sorry Donkey, when you shuffle off this mortal coil, RAGWUS will go with you. It hasn’t caught on, it never will.

          • S Moderation Douglas
            S Moderation Douglas 22 August, 2014, 11:34

            Sorry Donkey, when you shuffle off this mortal coil, RAGWUS will go with you. It hasn’t caught on, it never will.

          • S Moderation Douglas
            S Moderation Douglas 22 August, 2014, 11:34

            Sorry Donkey, when you shuffle off this mortal coil, RAGWUS will go with you. It hasn’t caught on, it never will.

          • S Moderation Douglas
            S Moderation Douglas 22 August, 2014, 15:56

            I thought it would bear repeating.

            Apparently CWD agrees!

        • T Mind of Ted Your God
          T Mind of Ted Your God 23 August, 2014, 21:16

          LOL here’s Duncey with the first dull-normal comment…..zzzzzzzzzz

          Reply this comment
  7. Ulysses Uhaul
    Ulysses Uhaul 20 August, 2014, 11:46

    Guys,

    You’re ruled. You lose every election. Calif. Is the new Hawaii. Bad schools, fat people, one party rule, government pork, tourist and service business low skill and pay jobs…..and the money never seems to run out!

    Most residents have low expectations as their enviro has always been doing with less…so….politicians promise the moon and deliver just….just enough to keep em happy.

    You got to give things away….The party platform with self reliance stuff doesn’t wring well out there…..people want goodies.

    Reply this comment
  8. Ulysses Uhaul
    Ulysses Uhaul 20 August, 2014, 12:04

    Ring……sorry……WRING DENOTES HARD WORK…..we couldn’t expect that….

    Reply this comment
  9. SeeSaw
    SeeSaw 20 August, 2014, 12:23

    Mr. Reed, you and others keep saying that those initiatives in San Jose and San Diego were passed by landslides. What you do is spin the numbers until they come out looking like what they really are not. When only 14% of the eligible voters turn out for an election, I call it an apathy-landslide. To me, 70% of 14% is not a landslide!

    Reply this comment
  10. bob
    bob 20 August, 2014, 12:27

    You really think Brownie is going to seriously reform anything when it goes against the unions???

    Old Brownie knows who butters his bread.

    Reply this comment
  11. SeeSaw
    SeeSaw 20 August, 2014, 12:45

    Its all relative, Bob. Would you have expected Newt Gingrich to take a position not in keeping with the wishes of Sheldon Adelson?

    We have a local Congresswoman who got elected when Bloomberg put 3+ million dollars into her race, because he didn’t like the platform of her opponent. She got buttered-bread that she wasn’t even expecting.

    You can criticize Brown all you want, but he is not going to change–he is the most that Californians are ever going to get in the way of pragmatism.

    Reply this comment
  12. S Moderation Douglas
    S Moderation Douglas 20 August, 2014, 15:26

    The most common spiking example is (where it is allowed) an employee “cashing in” unused vacation/sick leave his last year and having that counted as his “yearly salary”. These are the notorious cases where someone ends up with a pension LARGER than his actual ending salary. This the one most clearly targeted by PEPRA.

    We have seen cases (in CalTRANS maintenance) where a supervisors job opens up and NOBODY WANTS IT. The ten percent pay increase isn’t worth the hassle of being a middleman between management and crew. Often there is someone close to retirement willing to take the job for (gasp) a better pension. He usually has to hold it for at least three years to get the full benefit. I was on the list for most of my career, but every time a position came up, I did a cost-benefit analysis, and passed it up. Even at the end of my career.

    Same way with Superintendent. The job pays more than a supervisor, but there is NO OT, so they usually make less annually than many of their subordinates. Again, if you are near the end of your career, it MAY be worthwhile to lose money for a few years in order to get a better pension. I don’t know anything about fire Captains. And I suspect your “knowledge” of same is anecdotal at best.

    (Incidentally, a CalTRANS Superintendent is a good example of the “average state salary”…about $70,000 a year (with no OT). The position requires working up through the ranks, usually ten to twenty years, then involves the responsibility for hundreds of miles of roadway, supervision over three to four dozen personnel and millions of dollars worth of materials and equipment. IF you are the “average” private sector worker earning $53,000 driving a forklift, you are NOT going to lateral into an “average” state job.)Or your fork lift driver could get an engineering degree and license,for the “average” state pay.

    I believe, (I have read it before, but won’t waste my time verifying) part of the actuarial process is to ANTICIPATE progressive salary increases (including promotions) and build that factor into the “normal cost”. A lower level fireman OR maintenance worker pays a normal cost AS IF he were expected to be promoted. Check it out.

    ………………………
    “beholden contrators” (sic)

    LOVE IT!!!

    Buzzwords!!!

    Tough Love responded to me not long ago that he “never called me a crook”. How much closer can you get? Beholden contractors, bought off politicians, grossly excessive pensions STOLEN from the taxpayers.

    buzzwords can substitute for facts and logic, apparently?
    ………….
    “assuming unrealistically high returns”……………..maybe, and yes, some of this is political, and greatly complicated by the record losses of 2008. BUT the much hyped “risk free rate” seems to be excess in the other direction. Hopefully some of this will be corrected in the near future….by more level headed players instead of knee jerk emotional malcontents.

    The Actuaries Association seems to recognize the risk free rate for reporting purposes, but not necessarily for determining normal rates.

    And still…..the glass is AT LEAST half full.

    Reply this comment
  13. NTHEOC
    NTHEOC 20 August, 2014, 15:34

    bob says:
    You really think Brownie is going to seriously reform anything when it goes against the unions??? Old Brownie knows who butters his bread.
    =====================================
    Who butters Gov Rick Perry’s bread bob?? Or Gov Walker of Wisconsin? But your ok with that kind of butter huh!!!!

    Reply this comment
    • bob
      bob 21 August, 2014, 11:02

      Who butters Gov Rick Perry’s bread bob?? Or Gov Walker of Wisconsin? But your ok with that kind of butter huh!!!!

      No it’s not OK with me but the issue in Colliefornia (as Ahnode calls it) isn’t Rick Perry or Walker, it’s Brownie.

      Reply this comment
  14. S Moderation Douglas
    S Moderation Douglas 20 August, 2014, 16:32

    I don’t think Brown cares one whit about the unions. I was working during his first (or second) term, when after several years with high inflation and NO raises, the legislature passed a general twelve percent increase. Brown vetoed it. One of the few vetoes the legislature overrode, thank goodness.

    Teachers were particularly unhappy. He said they didn’t need raises because they were motivated more by psychic rewards than by money.

    You can’t butter his bread. He already has more butter than you can dream of. And more bread,too.

    Reply this comment
    • Richard Rider
      Richard Rider 20 August, 2014, 16:43

      Brown may not “care” about the union members. But he knows he needs their support not only for reelection but for bills in the legislature. He’ll give away the farm (hell, the whole damn Central Valley!) to rule with impunity.

      H.L. Mencken described it best when he said that “elections are sort of an advance auction of stolen property.” And in California, the unions are by FAR the highest bidders!

      Reply this comment
      • S Moderation Douglas
        S Moderation Douglas 22 August, 2014, 10:39

        And Big Daddy Unruh said:

        “If you can’t eat their food, drink their booze, screw their women and then vote against them, you have no business being up here.”

        Dang politicians just don’t stay bought, even Democrats.

        Powerful Public Employee Unions is an oxymoron.

        Reply this comment
  15. NTHEOC
    NTHEOC 20 August, 2014, 18:04

    Dick Rider says,
    And in California, the unions are by FAR the highest bidders!
    —————–
    It is a known FACT that private sector corporations and big business outspend public unions in California politics 3 to 1 on average!

    Reply this comment
    • S Moderation Douglas
      S Moderation Douglas 20 August, 2014, 18:11

      At least.

      Reply this comment
    • Donkey
      Donkey 20 August, 2014, 19:06

      Lets see the facts ntheoc? That’s right FF, another lie!! 🙂

      Reply this comment
      • NTHEOC
        NTHEOC 20 August, 2014, 19:56

        Where were you last night at Taco tuesday Donk?

        Reply this comment
        • Donkey
          Donkey 20 August, 2014, 20:53

          I’m in Yellowstone right now ntheoc, will be heading to Virginia on the 30th for the UCLA game and then back to Sunset Beach. 🙂

          Reply this comment
          • SkippingDog
            SkippingDog 20 August, 2014, 22:23

            You’re on vacation and still coming here to pick arguments and post RURG’s? Wow.

          • Donkey
            Donkey 21 August, 2014, 06:05

            Skdog, when I am not doing service work for my fellow citizens I am embracing my freedom and curiosity for life. When I sit down and look at the sites I contribute to it is in my nature to respond to the lies of fools.
            There is an internal sense of justice inherent in the human soul, those that feed at the RAGWUS have, for the most part, lost their capacity to access this virtue. That’s where I come in, to remind the solecistic mooches of the RAGWUS that the truth of their fraud is being documented. 🙂

          • SkippingDog
            SkippingDog 21 August, 2014, 15:41

            Have your doc check your meds. Seriously.

          • Donkey
            Donkey 22 August, 2014, 06:40

            Yes Skdog, the typical RAGWUS LE/Soviet Union response when the truth is present! 🙂

          • T Mind of Ted Your God
            T Mind of Ted Your God 23 August, 2014, 21:20

            LOL moron posting on his vacation!

  16. californianative
    californianative 20 August, 2014, 18:04

    All this talk of butter makes me think of analogies ( pun intended). Think of the ” Get the butter” scene in Last Tango in Paris. Now, guess which one is the California Taxpayer? Hint, it isn’t Marlon Brando!

    Reply this comment
  17. S Moderation Douglas
    S Moderation Douglas 20 August, 2014, 18:09

    Unions may be the largest *single* “bidders”, but:
    Opensecrets:

    ” The broadest classification of political donors separates them into business, labor, or ideological interests. Whatever slice you look at, business interests dominate, with an overall advantage over organized labor of about 15-to-1.”

    ” Even among PACs – the favored means of delivering funds by labor unions – business has a more than 3-to-1 fundraising advantage. In soft money, the ratio is nearly 17-to-1.”

    “In this world of sin and sorrow there is always something to be thankful for; as for me, I rejoice that I am not a Republican.”

    H. L. Mencken said a lot of stuff.

    Reply this comment
    • NTHEOC
      NTHEOC 20 August, 2014, 18:24

      So Richard Rider, Don’t let the FACTS get in the way of your rants!

      Reply this comment
    • Richard Rider
      Richard Rider 20 August, 2014, 19:13

      MOST of what unions spend is for lobbying and supporting candidates. Only a fraction is reported as political spending. Moreover, 93% of the money goes to Democrats. In CA, businesses contribute a lot, but it’s split between the two parties, with the DEMOCRATS usually getting more of the money in California.

      Moreover, unions spend a fortune on local candidates — far, FAR more than businesses.

      Of course, “Open secrets” is only a slightly less objective a source than SEIU. Their “figures” are blatant propaganda with no credibility outside progressive circles.

      Reply this comment
      • S Moderation Douglas
        S Moderation Douglas 20 August, 2014, 20:38

        I don’t know where you get “accurate” information, especially with the mares nest that is PACs and other organizations, but it’s hilarious that businesses split their donations between both parties!!!

        They’re hedging their bets, so no matter who gets in, they win? And if they give even half as much as OpenSecrets says, they are giving TWICE as much to Democrats as the unions are.

        Who’s buying who?

        Reply this comment
  18. NTHEOC
    NTHEOC 20 August, 2014, 18:28

    Richard Rider says
    “captain” — the guy in charge of the 3-4 man fire truck. Big whoop.
    ———————————
    Richard Rider
    Title
    Chairman
    Company
    San Diego Tax Fighters
    Talk about BIG WHOOP!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

    Reply this comment
    • SkippingDog
      SkippingDog 20 August, 2014, 22:26

      Rider has always been a great local mouthpiece for the wingnut fringe of Southern California anti-tax activists. Guess who funds his campaigns….

      Reply this comment
      • Donkey
        Donkey 23 August, 2014, 07:45

        The LE propagandist always attacks the bearer of truth, acting the fool with failing lies, he hastens his own demise. 🙂

        Reply this comment
        • SkippingDog
          SkippingDog 23 August, 2014, 12:16

          Nice, Donkster! Another version for your “end is near” sandwich sign board. You should do this one with red letters on a yellow background.

          Reply this comment
          • Donkey
            Donkey 23 August, 2014, 16:40

            It’s all playing out in Missouri Skdog, all on film, the LE RAGWUS is looking just like a Putin clone. 🙂

          • T Mind of Ted Your God
            T Mind of Ted Your God 23 August, 2014, 21:23

            Duncey are you taking your meds? Is the Mo. anarchy exciting you little buddy? It is sweeeeeeeping the nation! We’re dooooooooooomed—- good thing you are a free holder!!!

          • Donkey
            Donkey 24 August, 2014, 10:27

            My little parrot TCS returns with absolutely nothing to offer!!! 🙂

        • T Mind of Ted Your God
          T Mind of Ted Your God 23 August, 2014, 21:21

          He only attacks the dull ranters with poor facts as far as I can see.

          sorry little buddy!

          Reply this comment

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