Union appeal focuses attention on pension precedent

Pension reformSACRAMENTO – A decision by four Marin County public-employee associations to appeal a pension-related case to the California Supreme Court could ultimately determine whether localities have the tools needed to rein in escalating pension debt. At issue is how far officials can go to reduce some benefits for current employees after a state appeals court has chipped away at a legal “rule” long favored by the state’s unions.

In August, a California appeals court ruled against the Marin County Employees’ Association in its case challenging a 2012 state law reining in pension-spiking abuses – i.e., those various end-of-career enhancements (unused leave, bonuses, etc.) that public employees use to gin up their final salary and their lifetime retirement pay.

One of the few areas of widespread agreement at the Capitol on public-employee pensions involves spiking. Gov. Jerry Brown signed into law the Public Employees’ Pension Reform Act of 2013, known as PEPRA, to reduce escalating pension liabilities. Most of its provisions applied to new hires only. The governor also signed related legislation, Assembly Bill 187. Its goal was to “exclude from the definition of compensation earnable any compensation determined … to have been paid to enhance a member’s retirement benefit.”

This limitation on pension spiking was implemented by the Marin County Employees’ Retirement Association to help the county reduce its pension debt. As the court explained, “Reaction to the change in policy was almost immediate.” Five public-employee associations filed suit, claiming that a ban on these spiking conditions reduced promised levels of pay to their members. They argued this was an impairment of their “vested rights.” Vesting confers ownership rights.

Even though the dollars at issue are relatively minimal, the case has become a major flashpoint. California courts have long abided by something known as the “California Rule.” It’s not a law or even a rule, actually. It refers to a series of court rulings concluding that once a pension benefit is granted to public employees by a legislative body (board of supervisors, city council, state legislature), it can never be reduced – even going forward.

In the private sector, for instance, courts allow employers to reduce pension benefits, starting tomorrow. Employees could be paid everything promised to the point of the benefit change, but they can have certain benefits removed or reduced in the future. That’s seen as reasonable given they haven’t earned them yet. It’s different in the public sector.

In California (and a number of other states that follow a similar rule), these benefits can never be reduced. The problem, from a public-finance point of view, is that reducing benefits for new hires only won’t address the bulk of the debt problem until those employees start retiring in 25 or 30 years. Fixing the current debt problem requires dealing with current employees.

Ironically, almost all of the benefit increases public agencies have granted to union members since the 1999 passage of Senate Bill 400 have been done “retroactively.” In other words, the courts have allowed public agencies to give a boost in pensions to public employees for years they previously have worked – but they won’t allow those same agencies to reduce future benefits for years that have yet to be worked. This is politically controversial, but there’s little debate that such a rule has been followed by the courts.

“Public employees earn a vested right to their pension benefits immediately upon acceptance of employment and … such benefits cannot be reduced without a comparable advantage being provided,” according to the plaintiffs, as quoted in the appeals court decision. “A corollary of this approach is that public employees are also entitled to any increase in benefits conferred during their employment, beyond the benefit in place when they began.” In this view, compensation is a one-way ratchet.

This understanding has largely undermined every major reform proposed in California. For instance, the courts gutted the city of San Jose’s voter-approved 2012 pension-reform initiative because it rolled back future benefits for current employees. And the “California Rule” has been the obstacle that has stopped reformers from coming up with other similar approaches.

In this case, Justice James Richman ruled, “(W)hile a public employee does have a ‘vested right’ to a pension, that right is only to a ‘reasonable’ pension – not an immutable entitlement to the most optimal formula of calculating that pension. And the Legislature may, prior to the employee’s retirement, alter the formula, thereby reducing the anticipated pension. So long as the Legislature’s modifications do not deprive the employee of a ‘reasonable’ pension, there is no constitutional violation. Here, the Legislature did not forbid the employer from providing the specified items to an employee as compensation, only the purely prospective inclusion of those items in the computation of the employee’s pension.”

The judge pointed to conclusions from California’s watchdog agency, the Little Hoover Commission, pointing to uncontrollable unfunded pension liabilities. As the commission explained, “To provide immediate savings of the scope needed, state and local governments must have the flexibility to alter future, unaccrued retirement benefits for current workers.” The commission pointed to spiking as a particular problem. This report, he wrote, is part of what motivated the state Legislature and governor to implement reform.

Furthermore, the judge pointed to previous cases acknowledging that government entities have the right to “make reasonable modifications and changes in the pensions system ‘to permit adjustments in accord with changing conditions and at the same time maintain the integrity of the system and carry out its beneficent policy.’” This echoes what myriad pension reformers have argued: agencies are not stuck watching their systems go over the cliff. They have the right and duty to make adjustments to assure their future solvency.

If the California Supreme Court sides with the unions, then local governments will have fewer options left to gain control of their pension debts. If the court agrees with Judge Richman, then pension reform could be a brand new ballgame – although it’s unclear whether the court might toss the California Rule entirely or simply allow localities to change some of the benefits within the framework of that rule.

The court has 60 days to decide whether to consider the matter, according to reports. Unions and reformers will no doubt be watching the court’s decision closely.

Steven Greenhut is Western region director for the R Street Institute. Write to him at [email protected].

133 comments

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  1. Queeg
    Queeg 11 October, 2016, 22:26

    Comrades

    Where is Rizzo and Donkey and Skippy or Poodle, whatever?

    Reply this comment
  2. Spurwing Plover
    Spurwing Plover 12 October, 2016, 07:39

    Unions are only out for themselves and keeping their power to force all works to belong to their unions thats why they oppose RIGHT to WORK laws

    Reply this comment
    • SkippingDog
      SkippingDog 13 October, 2016, 15:09

      Unions are created to protect the interests of their members. Did you just fall off a turnip truck?

      Reply this comment
      • Queeg
        Queeg 13 October, 2016, 16:05

        Skippy needs prunes…..sorta uptight.

        Reply this comment
      • Tough Love
        Tough Love 13 October, 2016, 16:54

        Skippy,

        In your above statement, change “protect the interests”, to “increase or at least maintain the ALREADY grossly excessive Public Sector compensation by any and all means …. and to-hell-with-the-taxpayers” ….. and you’ve got it right.

        Reply this comment
  3. TB
    TB 12 October, 2016, 12:53

    More and more people are beginning to realize that Defined Benefit plans like public pensions are not sustainable, including the private sector which has more or less done away with them. Here is my solution to this looming crisis that is only going to get worse without any correction of course:

    https://drive.google.com/file/d/0B90sU3A85q46OE9BZHJFSWEzbGM/view?usp=drivesdk

    Please help spread the word…

    Reply this comment
  4. Tough Love
    Tough Love 12 October, 2016, 19:19

    Quoting …

    “In the private sector, for instance, courts allow employers to reduce pension benefits, starting tomorrow. Employees could be paid everything promised to the point of the benefit change, but they can have certain benefits removed or reduced in the future. That’s seen as reasonable given they haven’t earned them yet. It’s different in the public sector.”

    That’s correct, and INDEED “reasonable”.

    But Public Sector workers believe that THEY are “special” and what’s “reasonable” for everyone else isn’t quite reasonable enough for THEM.

    There is simply ZERO (yes ZERO) justification for PUBLIC Sector workers to have this guarantee that their FUTURE SERVICE pension accruals cannot be reduced … just as can those granted Private Sector workers.

    The ONLY reason CA’s laws and regulations have developed this way (as well as the undeniably GROSSLY EXCESSIVE pensions & benefits) is the COLLUSION between the Public Sector union and our Elected Officials, with the former BUYING the favorable votes (on pay, pensions and benefits) of the latter with campaign contributions and election support. And of course the fact that CA’s judges (who participate in the SAME plans) have a HUGE conflict of interest in adjudicating such cases/issues.

    Reply this comment
  5. Bronson
    Bronson 13 October, 2016, 04:29

    I am 34 years old and just starting o understand this issue. There is no way my generation will allow theft like this. I would rather disband the constitution than continue the unfair payments. If this leads to a revolution with bullets, so be it. Bring it on. Public hangings are a good exercise to prevent theft, and restore fairness.

    Reply this comment
    • S Moderation Douglas
      S Moderation Douglas 13 October, 2016, 05:12

      May be, like so many others, you are just starting to mis-understand this issue.

      “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”

      There are …some… public sector workers who, when pensions and benefits are factored in, earn more than they would in an equivalent private sector job. There are also some who earn much less than the private sector.

      At age 34, you should learn the difference before you start hanging people.

      Reply this comment
      • Tough Love
        Tough Love 13 October, 2016, 08:24

        Spoken by S Moderation Douglas, a retired CA Public Sector worker hoping that HIS pension won’t one day (OH SO JUSTIFIABLY) be reduced.

        And Bronson …. your generation should (just as Step #1, to stop the financial hole we are in from growing even deeper every day) DEMAND that ALL Public Sector DB pensions be frozen for the future service of all CURRENT workers, and replaced for their future service with a DC (401k-style) Plan with a Taxpayer %-of-pay contribution no greater than the 3% to 4% of pay that Private Sector wiorkers typically get from THEIR employers.

        Public Sector workers are NOT “special” and deserving of greater pensions and better benefits …. on the Taxpayers’ dime.

        Reply this comment
        • S Moderation Douglas
          S Moderation Douglas 13 October, 2016, 10:56

          Seriously?

          Transparent California shows a custodian retiring in 2014 after 37 years with a $23,600 pension.
          Another after 37 years with a $27,000 pension. Fairly typical.

          One of the few things you and I might agree on is that these two custodians, due to pensions and benefits, have a MUCH higher total compensation than the average private sector custodian.

          Michael Genest (I beg your indulgence again, Mr. Genest.) retired in 2009 after 31 years and now has a pension over $137,000 a year. By his account, and I do not disagree…

          “We could have made a lot more money in the private sector. We are making more money.”

          As per Bronson, “to prevent theft, and restore fairness,” for which of these three retirees would you condone public hangings? Or disband the Constitution?

          “Bring it on?”

          No… Grow up!

          Reply this comment
          • Tough Love
            Tough Love 13 October, 2016, 12:37

            For every low-paying Public Sector worker, there is an equally low paid Private Sector workers who doesn’t retire after a full career with 75% of his/her final average pay.

            If they are doing comparable work, with reasonably comparable wages there is ZERO reason to provide ….. AT TAXPAYER EXPENSE ….. the Public Sector worker with a retirement and benefit package greater than what the Private Sector workers gets …. because it’s GREATER THAN “market rate” compensation. There is zero justification to sucker taxpayers into paying more than “market rate” compensation.

            And it’s does NOT change the picture by arguing that that low-paid Public Sector workers “needs” that pension to survive. Does HE need it MORE THAN the comparably paid Private Sector worker…. likely with no pension ?
            ———————-

            And at the other extreme, are CA’s Safety workers really worth a “Total Compensation” package TYPICALLY in excess of $200K annually when PROPERLY valuing their incredibly generous pensions and benefits ?

            No, and certainly much closer to HALF that figure.

      • O'moore
        O'moore 14 October, 2016, 10:14

        Govt. pensions are much higher than soc. security and private pensions but that hides the point, govt. pensions cost more than twice as much as private pensions and soc. security. Here in Pacific Grove pensions cost 25% of annual revenues and pension debt is $1.4M per employee. They all just rec’d a 14.6% raise over two years, plus higher promotion steps( a police sergeant gets the raise but can gain another 14% thru promotion thru sergeant steps).

        Reply this comment
        • Common cents
          Common cents 20 October, 2016, 07:28

          Because the government can’t escape responsibility to make sure people have enough to live so it makes sense that they would pay a decent amount of salary and retirement.

          Worker A retires from the state with a $25,000 pension

          Worker B “retires” from Taco Bell with enough savings to have $10,000 per year to live on. Guess who supplements B’s retirement income with $15,000 (at least) of welfare? If you guessed “the State” you win a prize.

          Taco Bell can get away with it because they have no continuing responsibility to that employee but the State does. The tax payer pays either way! What difference does it make whether the government employee gets 25k pension or 15k welfare to go along with a reduced pension benefit? No difference at all.

          Reply this comment
  6. SeeSaw
    SeeSaw 13 October, 2016, 10:33

    Bronson, please go back to your hole and tunnel over to the country you want to live in. The US is not for you.

    Good god, TL–you just hit rock bottom.

    Reply this comment
    • Tough Love
      Tough Love 13 October, 2016, 14:06

      Bronson,

      Pay no mind to SeeSaw …. a 70-something year old Public Sector long-career retiree who freely admits that she would be in deep sh** w/o her beloved CalPERS pension …. furiously defending it as appropriate even though 3 to 4 times greater in value upon retirement than what she likely would have received in retirement benefits if holding the SAME job in the Private Sector.

      The greed and disdain for Private Sector taxpayers is palpable.

      Reply this comment
    • Bob
      Bob 13 October, 2016, 17:34

      You drove away what’s his name…I think it was Desmond. He no longer works in Colliefornia (as Ahnode calls it) so no longer pays your pension.

      Just keep driving away young people like this Bronson fellow and see who’s left to pay your pension!

      Reply this comment
  7. S Moderation Douglas
    S Moderation Douglas 13 October, 2016, 14:34

    No need to do Internet math here to two decimal places. In rough terms, according to Biggs nationwide data, that janitor is making roughly twenty percent more each year in total compensation than his private sector peer. And Mr. Genest is making twenty percent less.

    But twenty percent to the janitor is about ten thousand a year. Twenty percent of Mr. Genest’ compensation is over thirty thousand.

    To be “fair,” we could take ten grand each from three janitors and bring Mr. Genest up to par.

    Or are you suggesting we should be fair to the janitor but unfair to the professional?

    You seem to be enamored (or obsessed) with your “market rate” compensation, which has resulted in increasing income inequality in the U.S. Income disparity is worse in the U.S. than in almost every OECD country, and the one sector of the workforce that has the least income disparity is the one you want to “fix”?

    In the public sector, the highest paid workers are basically subsidizing the lower levels, and this, to you, is a bad thing?

    SeeSaw may be right. You have hit rock bottom. Certainly so, if you agree with disbanding the Constitution to correct your *opinion* of public sector compensation.

    Reply this comment
    • Tough Love
      Tough Love 13 October, 2016, 16:32

      Public Sector “professionals” will deserve WAGES equal to their Private Sector counterparts if/when they both:

      (a) work the 60 hrs/wk typical of Private Sector CPAs, Attorneys, etc., and
      (b) are as “productive” (in measurable work-product-output per hour) as their Private Sector counterparts. I.e., when you bill clients by the hour for services rendered, you cannot bulllsh** with co-workers, take 5 “coffee-brakes”, and spend 2 hrs/day surfing the web.
      ———————————————-

      The above applies to WAGES. Public Sector Professionals already get FAR FAR greater pensions & benefits …… as do all OTHER PUBLIC Sector workers.
      —————————-

      And no, I’m not fixated with “market rate” compensation. It’s simply that the compensation of PRIVATE Sector workers (which make up 85% of America’s workers) determines “market rate” compensation, NOT PUBLIC Sector workers (who represent only 15% of America’s workers) and where COLLUSION between the Public Sector Unions and our self-interested Elected Officials (BOUGHT with Public Sector Union campaign contributions and election support) has resulted in grossly excessive PUBLIC Sector compensation.

      Reply this comment
  8. SeeSaw
    SeeSaw 13 October, 2016, 15:49

    Together they don’t just want to tear up the Constitution–they would also recommend anarchy and cold-blooded murder! TL is the lowest of the low–still never got it that public sector workers are taxpayers and pay the same fees that he pays–that is if he pays any at all.

    Reply this comment
    • Tough Love
      Tough Love 13 October, 2016, 16:00

      Ah, the old …”we are taxpayers too” response ….. of course ignoring that for each incremental $1 in taxes that Public Sector workers ADVOCATE FOR, they will get back $5+ (the other $4 coming form PRIVATE Sector Taxpayers) all going to fund their current grossly excessive PUBLIC Sector pensions & benefits.

      No SeeSaw, we’re NOT fooled by such nonsense.

      Reply this comment
  9. Spurwing Plover
    Spurwing Plover 13 October, 2016, 16:45

    Sorry Norma Raye but these are no longer your unions anymore

    Reply this comment
  10. S Moderation Douglas
    S Moderation Douglas 13 October, 2016, 17:58

    Keep throwing it, TL. Sooner or later, something is bound stick.

    Here is a shocking headline… Them deplorable public workers!

    “Apathetic Workers in State and Local Government Are Costing Taxpayers Billions”

    (The Fiscal Times, July 7, 2016)

    But…

    “More broadly, employee disengagement across the economy costs the U.S. economy roughly $500 billion a year, which suggests that the problem is just as prevalent — or more so — within the private sector.”

    You seem to have some childish idealism of the “private sector”, or maybe it just looks that way compared to your inordinate disdain for all things public. In fact, there is very little difference. Most of the workers are actually the same people. Fewer than twenty percent of public workers are career workers. The others move back and forth from one sector to the other.

    http://theraddonreport.com/wp-content/uploads/2010/06/enemy_square.jpg

    Reply this comment
    • Tough Love
      Tough Love 13 October, 2016, 23:32

      Required reading …..

      https://www.alec.org/publication/pensiondebt2016/

      I suggest that you develop a “Plan B” for your retirement needs.

      CA is 35.6% funded under a PROPER valuation.

      Reply this comment
      • S Moderation Douglas
        S Moderation Douglas 14 October, 2016, 05:58

        “Society of Actuaries proposes new discount rate for public pension funds”

        Pensions and Investments, Feb.24, 2014

        “The panel rejected use of a risk-free rate — or rates on the Treasury yield curve — to discount liabilities despite the basis in economic theory to balance generational risks, the report said.”

        “The 68-page ”Report of the Blue Ribbon Panel on Public Pension Plan Funding” recommends using the risk-free rate as a risk management tool to discount liabilities to compare against the investment return assumption as a way to gauge the level of investment risk taken by the plan.”

        The panel included, among others, David Crane and Andrew Biggs.

        Reply this comment
  11. Bronson
    Bronson 13 October, 2016, 20:27

    Seesaw, I am young.This will be our country. You are a hag and soon will be gone.

    Reply this comment
    • SeeSaw
      SeeSaw 13 October, 2016, 21:57

      Sorry buddy boy Bronson–this has been my country all my life and it will be my country until the day I die. Your mother and father must be proud!

      Reply this comment
      • Ulysses Uhaul
        Ulysses Uhaul 13 October, 2016, 23:19

        Bronson

        You’re out of line. CWD posters are known for reasonable, generally respectful banter, no tomes, long running personal story lines and deeply believed populist nonsense, but respect and patience with others’ opinions though some are sheer insanity.

        Clean up…..please

        Reply this comment
  12. Bronson
    Bronson 14 October, 2016, 03:48

    “Ask not what I can do for my country, ask what my country can do for me”…..$ee$aw.

    Reply this comment
  13. S Moderation Douglas
    S Moderation Douglas 14 October, 2016, 06:15

    You’re falling for the hype.

    The world according to Tough Love…

    ” Because ALL of CA’s PUBLIC Sector DB pensions (AND benefits) are unnecessary, unjust, unfair to Taxpayers, grossly excessive, and clearly unaffordable, YES, any CA Public Sector worker retired post SB400 (AND most before) are indeed unjustly ….suckling at the taxpayers’ teat.”

    In the real world of empirical evidence, every major study says that, with pensions and benefits added in, SOME public workers earn more than their private sector counterparts. SOME earn less.

    The claim that ALL public pensions are excessive is clearly not true.
    The claim that MOST public pensions are excessive is arguable, at best.

    If you have evidence to the contrary, bring that instead of puerile insults and threats.

    Reply this comment
    • Tough Love
      Tough Love 14 October, 2016, 09:06

      Quoting S Moderation Douglas…..

      “In the real world of empirical evidence, every major study says that, with pensions and benefits added in, SOME public workers earn more than their private sector counterparts. SOME earn less. ”

      Of course “some” get more and “some get less, but it’s the OVERALL AVERAGE that financially impacts Taxpayers. And in one of the very few studies that studies State-specific Public/Private Sector compensation differences (the AEI study), in BOTH CA and NJ, PUBLIC Sector workers have a 23%-of-pay compensation advantage.

      Taxpayers, how much more would YOU have at the end of a long career if you received an ADDITIONAL 23% of pay to save and invest EVERY year…. $500K, $1 Million, $2 Million, more ?

      In the world according to S Moderation Douglas, we should glance over that.

      No, it HUGE and grossly unfair to Private Sector Taxpayers. Public Sector workers are NOT “special” and deserving of greater …TAXPAYER-FUNDED …. pensions and benfits.

      Reply this comment
      • Tough Love
        Tough Love 14 October, 2016, 09:31

        The source of the 23% PUBLIC (vs PRIVATE) Sector Total Compensation advantage is Figure 6 in the PDF which can be reached via the Blue “Read The PDF” in the following link:

        https://www.aei.org/publication/overpaid-or-underpaid-a-state-by-state-ranking-of-public-employee-compensation/

        Notably, the study authors also measured the “value” of the far greater job security in the Public Sector …….. how many Private Sector workers are not not laid-off (and unemployed) at least a few times during a career ?

        The above 23% EXCLUDES the value of the greater PUBLIC Sector job security. But when added it, the 23% Public Sector Total Compensation advantage increases to 33% in CA and 34% in NJ …. per Figure 13 in the same link.

        Reply this comment
  14. S Moderation Douglas
    S Moderation Douglas 14 October, 2016, 13:08

    Tough Love…

    “No, it HUGE and grossly unfair…”

    Still hung up on one graph. Yes, I strongly recommend the AEI study. There were other state specific studies which determined public workers were compensated equal to or less than similar private workers. The main difference being the use of a risk free discount rate in the AEI study. Feel free to debate the appropriateness in this case. Everyone else does.

    It is surely safe to assume there is bias as well as unintentional error built into any of these studies. And the data from the studies is four to eight years old. Eight very volatile years in which salaries and pension reforms have changed in every state.

    Taxpayers, don’t try to take that “ADDITIONAL 23% of pay” to the bank. It’s what my wise wife calls “if-come”. Your bank will not take imaginary money or Tough Love dollars.

    Reply this comment
    • Tough Love
      Tough Love 14 October, 2016, 15:13

      S Moderation Douglas,

      Let’s show the PRIVATE Sector Taxpayer-readers just how much more THEY would have if THEY received what Public Sector workers in CA and NJ now get …. notwithstanding your (conflict-of-interest) protestations to the contrary.

      Let’s take what might be an “average” CA or NJ worker, and assume that he/she earned $100,000 in the last (30-th) year of service ….. certainly reasonable averaging police, teachers, and other misc. workers.

      Assuming that their wages increased (on average at 5% per year, reflecting merit increases, colas, step increases, promotions, etc.), we can back-into the first-year wages ….. that being $24,294.63,and increasing at 5% in each subsequent year until reaching $100,000 in the 30-th year.

      If we take 23% of each year’s pay (with the contribution assumed to be made at midyear) and accumulate each contribution to the end of the 30-th year at 4%, 6%, 8%, and 10% interest, the following would be the accumulated values:

      At 4% …. $614,601

      At 6% …. $817,811

      At 8% …. $1,111,206

      At 10% …. $1,538,669

      AND, with this Public Sector compensation advantage being buried in their grossly excessive DB pensions, it’s tax-deferred, so readers should look at the above amounts as ADDITIONAL amounts you might have in a 401K Plan if YOU were simply paid the same compensation as our insatiably greedy Public Sector workers.

      Reply this comment
      • S Moderation Douglas
        S Moderation Douglas 14 October, 2016, 16:08

        Did anyone explain the meaning of GIGO?

        You start by assuming a 23% advantage. That advantage was from one outlier study. The advantage was based almost entirely on the “proper” discounting of pensions.

        Question, if a taxpayer puts an imaginary 23% of wages in the bank every year, how many real dollars will he have at the end of thirty years?

        Circular reasoning : A type of reasoning in which the proposition is supported by the premises, which is supported by the proposition, creating a circle in reasoning where no useful information is being shared. This fallacy is often quite humorous.

        Tough Love is also often quite humorous.

        Reply this comment
        • Tough Love
          Tough Love 14 October, 2016, 17:43

          One outlier study ?

          SHOW ME the other studies ….. giving State-specific Public/Private Sector Wage and Total Compensation comparisons.

          Always open to studies with appropriate assumptions & methodology.

          Reply this comment
  15. S Moderation Douglas
    S Moderation Douglas 14 October, 2016, 14:06

    Quoting Tough Love…

    “… it’s the OVERALL AVERAGE that financially impacts Taxpayers.”

    “PUBLIC Sector workers have a 23%-of-pay compensation advantage.”

    I believe it was Richard Ryder who cautioned me years ago about how “averages” can be misleading. The “average” Californian has one ovary and one testicle.

    Even if it were true, the “average” 23% over compensation doesn’t help us much.

    I have a hundred two-by-fours I have to load into the eight foot bed of a 93 Silverado. They vary in length from six feet to twelve feet, and the average length is ten feet.

    TEN FEET? That’s 25% too long!! So… do we cut 25% of each board?

    Clearly, that won’t work. That’s one of TLs pension reform plans; cut the future accrual of ALL workers by fifty percent (or more.)

    Back to the drawing board… Let’s cut only those boards longer than eight feet. For some of those boards, we will have to cut 33%, some will cut 25%, many, we won’t have to cut at all. Much more logical pension reform.

    Except…

    There was a reason some of those boards were twelve feet long. Your load is “sustainable”. Everything fits in your truck. But when you deliver those boards, you don’t have the materials you need to finish your job. Bad pension reform.

    Maybe… you need a different truck. It doesn’t have to be more expensive.

    Reply this comment
    • Tough Love
      Tough Love 14 October, 2016, 15:42

      Quoting S Moderation Douglas …..

      “Even if it were true, the “average” 23% over compensation doesn’t help us much. I have a hundred two-by-fours I have to load into the eight foot bed of a 93 Silverado. They vary in length from six feet to twelve feet, and the average length is ten feet.”
      TEN FEET? That’s 25% too long!! So… do we cut 25% of each board?”

      With examples like that (COMPLETELY irrelevant), AND evidently believing that it proves something ………. it’s no wonder your career responsibilities included light-bulb-changing.

      A 23%-of-pay AVERAGE Public Sector compensation advantage means just that…… after the study adjusted for the appropriate variables to compare COMPARABLE Public/Private Sector jobs, the Public Sector compensation was …… on average … 23% greater.

      Even a light bulb changer should be able to understand that …. and I’m CERTAIN this website’s reader’s can.

      Reply this comment
      • S Moderation Douglas
        S Moderation Douglas 14 October, 2016, 16:29

        So the reform is to cut EVERYONES compensation by 23%?

        Sorry, the workers AEI claims are the most “overpaid” are those at the bottom levels of public workers. Generally, their salaries are roughly equal to similar private sector workers.

        To make them “equal” would require completely eliminating pensions and retiree health care for this group. According to Biggs, public workers with high school or “some college” are about 40% of government workers.

        The combined pension and retiree healthcare of this group is entirely responsible for that 23%. It’s simple, go to table 4, page 60 of our favorite reference. Eliminate the bottom two categories of workers – high school and “some college”.

        The “public sector advantage” is gone.

        This is not good pension reform.

        It is the WalMartization of the public sector.

        Reply this comment
        • Tough Love
          Tough Love 14 October, 2016, 17:52

          Quoting SMD ……

          “So the reform is to cut EVERYONES compensation by 23%?”

          I didn’t say (or suggest that). A fair approach is desirable and appropriate …. as long as the NET RESULT is that Public Sector compensation …. for all Public Sector workers taken together ….. is 23% of pay LOWER.

          Because …as I stated above ….. THAT is what financially impacts the Taxpayers.
          ————————–

          Personally I couldn’t give a Sh** if you identified and reached the net 23% reduction by identifying 50,000 rich CA Public Sector workers willing to work for 30 years for free…………. as long as the net result eliminates the AVERAGE 23%-of-pay Public Sector total compensation advantage in place today.

          Reply this comment
          • S Moderation Douglas
            S Moderation Douglas 14 October, 2016, 19:42

            Of course you don’t give a Sh** . That was obvious years ago.

            No, you did not suggest cutting everyone’s compensation by 23%. You have mainly advocated two plans for reform. First, stop all prospective DB accruals and put all workers on a DC plan. Failing that, reduce future accruals by 50% (more for safety). Either of these ignores the fact that you are, on the one hand, reducing compensation for many of those who are already underpaid, and our janitor is still earning more than his private sector counterpart. That’s not reform, that’s just indiscriminate reduction, and does nothing for the ability to attract and retain qualified workers.

            Secondly, no matter how many times you repeat it, “23% advantage is from data up to eight years old and was controversial to begin with.

  16. Ted. Mentor to the doomed....Builder of the FUTURE!
    Ted. Mentor to the doomed....Builder of the FUTURE! 14 October, 2016, 14:09

    Hi Girls! I just found out this thread was going— since we are all posting the usual drivel and since nothing will happen in the supreme court, don’t you think I should have been at least notified about this?????

    Reply this comment
    • ricky65
      ricky65 15 October, 2016, 09:44

      Well somebody woke up Uncle Ted. (or maybe he just sobered up.)
      Now we will get some real expert opinion no doubt. And who would be better to opine than Ted since he is truly the ‘average Californian’ of SMD’s discussion above.
      One nut, ..one ovary and half a brain.

      Reply this comment
  17. Ted. Mentor to the doomed....
    Ted. Mentor to the doomed.... 14 October, 2016, 14:13

    Cal Pers value today??

    304 BILLION today baby!!!!!!!!!!!

    Reply this comment
  18. Bronson
    Bronson 14 October, 2016, 17:47

    Have you people no sense of integrity? Give your debt to the next generation. Public hangings are too kind, too fast.The illegals will figure it out and laws won t mean anything. They like knives, big knives.

    Reply this comment
    • Tough Love
      Tough Love 14 October, 2016, 18:00

      Integrity? Are you serious?

      They are all insatiably greedy Public Sector workers/retirees feeding at the trough and could give a crap for the taxpayers.

      Reply this comment
  19. Tough Love
    Tough Love 14 October, 2016, 18:58

    S Moderation Douglas,

    Above you stated …

    “Still hung up on one graph. Yes, I strongly recommend the AEI study. There were other state specific studies which determined public workers were compensated equal to or less than similar private workers. The main difference being the use of a risk free discount rate in the AEI study. ”

    Having read that study in it’s entirety (and HIGHLY RECOMMENDED to all readers … and which identifies specific flaws in the approach used by other researchers), I thought you were incorrect in your last sentence above, stating that …”The main difference being the use of a risk free discount rate in the AEI study.”

    So I checked to be sure. Indeed, the AEI study does NOT use a “risk free” rate.

    On Page 27 of the linked AEI study it says …

    “We choose to discount public pension benefits at 4.3 percent, which is the average yield over the past decade on 20-year Treasury securities. This is designed to reflect the typical accruals of benefits over the past decade. This approach is slightly different from the “market valuation” literature on public pension liabilities, which seeks to value liabilities at a given point in time and thus uses a discount rate specific to that point in time. For perspective, the current yield on 20-year Treasuries is around 3.5 percent.”

    The 4.3% rate used in the AEI study is VERY consistent with the rate that the US Gov’t REQUIRES of Private Sector Plans in the valuation of their pension Plans.

    Do you believe that the Gov’t is trying to punish these Plans by forcing them to use an unnecessarily conservative rate ….. or that these Private Sector Plans Sponsors would stand for it if actually true?

    Of course not, it’s the common USA PUBLIC Sector (ONLY) practice of using discount rates in the 7% to 8% range that is inappropriate ……. in the extreme. And CLEARLY used to hoodwink the Taxpayers into thinking that these promised Public Sector DB pensions are FAR less costly than they actually are.

    As Taxpayers learn the true VERY VERY high cost of currently structured Public Sector Pension Plans, they will demand an hard freeze (ZERO future growth) to all of them. And hopefully, they will have sufficient financial understanding of the costs to make certain that that freeze applies to the FUTURE service of all CURRENT (not just new) workers. Without that, we will have accomplished near-nothing.

    Reply this comment
  20. Ulysses Uhaul
    Ulysses Uhaul 14 October, 2016, 23:58

    You will pay for any pension shortfall…end of thread-

    Reply this comment
    • Tough Love
      Tough Love 15 October, 2016, 10:08

      Yes, but collectively, Taxpayers will only pay for a modest share. The remainder will come from a reduction in the promised (grossly excessive) payouts.

      Reply this comment
  21. TB
    TB 15 October, 2016, 10:52

    Pension Envy will eventually force public employees to take a reduction in their pensions, that’s why I think an approach like this would be best for everyone:

    https://drive.google.com/file/d/0B90sU3A85q46OE9BZHJFSWEzbGM/view?usp=drivesdk

    Reply this comment
    • Tough Love
      Tough Love 15 October, 2016, 12:50

      It’s not pension “envy”, is a matter of “fairness” to the Taxpayers.

      RIGHT NOW, Public Sector worker DB pensions in CA are ROUTINELY 3 to 4 times (4 to 6 times for Safety workers) greater in “value upon retirement”* than those typically granted comparable Private Sector workers who retire at the SAME age, with the SAME pay, and the SAME years of service.

      * “value at retirement” is the PROPER measure because it factors into the compensation comparison not only the MUCH greater Public Sector DB pension “formulas”, but also the material incremental value of COLA increases (virtually VERY rarely included in Private Sector Plans), and the MUCH younger retirement ages at which Public Sector workers can begin collecting a full/unreduced pension.

      It’s WAY past time for the DB pensions of all CURRENT (NOT just new) Public Sector workers to be frozen (with ZERO future growth) and replaced with a 401K-style DC Plan with the SAME 3% to 4% of pay “match” typically granted Private Sector workers.

      Public Sector workers are NOT “special” and deserving of greater pensions and better benefits …… on the Taxpayers’ dime.

      Reply this comment
    • t Mind of your Ted Godhead System
      t Mind of your Ted Godhead System 18 October, 2016, 09:04

      LOL— yeah—— that link shows a Constitutional plan! bwahahahahahah

      you girls get huge laughs with the same ol year after year zzzzzzzzzz lol

      Reply this comment
  22. Ulysses Uhaul
    Ulysses Uhaul 15 October, 2016, 14:24

    Toughie spreads false naughties……

    No true Californian will betray kids and senior pensioners except crusty doomers who hide behind guarded gates tripping on their 1970’s shag carpets while they clip fast food coupons!

    Reply this comment
    • S Moderation Douglas
      S Moderation Douglas 15 October, 2016, 16:07

      Have some empathy. This is where Tough Love is coming from… literally.

      ” Officer Vincent Aiello guides his patrol cruiser slowly down the leafy main drag of this quiet Bergen County town, past the coffee shop, the hair salon and the boutiques.

      He passes a serene procession of manicured lawns and Little League outfields. Further along, there’s a reservoir, a fishing pond and a farm stand.”
      …………

      In that Bergen County town, 30 of 31 officers made six figures last year, and the median salary was $121,177.
      ………….

      “There isn’t much violent crime here,” he said. “I wanted that smaller community. I wanted to know Mrs. Smith who lives on Main Street.”

      TL sees everything through the prism of his local “overpaid” police force.

      (And no “locker room” jokes about Mrs. Smith, please. Although I’m pretty sure she is a fictional character. )

      Reply this comment
      • Tough Love
        Tough Love 15 October, 2016, 16:39

        In NJ, the base pay is somewhat (about $20K) higher than in CA, but NJ’s pensions top out at 75% after 30 years with no COLAs, vs 90% with COLA increases in CA.

        Unquestionably (*especially with no COLAs in NJ …. Thank You Gov. Christie !), the CA Police Officer’s TOTAL COMPENSATION is higher.

        Reply this comment
    • T Ted America
      T Ted America 19 October, 2016, 08:47

      GOLD shag!!!!!!!!!!!!! lmao bwahahahahaha

      Reply this comment
  23. S Moderation Douglas
    S Moderation Douglas 15 October, 2016, 18:54

    Maybe that’s why S Moderation is not so fervent as some others concerning public sector pay… and benefits.

    Highest paid police officers in my area are $68,629.00.

    Is 90% of $68,629.00 higher than 75% of $121,177 ?

    Overall, Bergen County, New Jersey cost of living is 153.70.

    Cost of living in my area is 108.

    Reply this comment
    • Tough Love
      Tough Love 15 October, 2016, 22:05

      Quoting SMD …..

      “Highest paid police officers in my area are $68,629.00.”

      Somehow I doubt that “typical” 20-year-service CA Police officers (State or Local) have a base pay of $68,629, and I bet that Transparent California would show that to be true.

      But perhaps it’s true “in your area” …. if you live in a poor area. The are poorer areas in NJ where mid-career Police Officer salaries are below $100K.
      ———————————————-

      And THIS statement of yours is intentionally misleading….

      “Is 90% of $68,629.00 higher than 75% of $121,177 ?”

      because we are talking about “Total Compensation” and for an apples-to-apples comparison, the CA Police officer’s pension needs to be increased by 1/3 to reflect the value of the Inclusion of COLAs that are NOT included in NJ pensions.

      Reply this comment
      • Tough Love
        Tough Love 15 October, 2016, 22:25

        Follow-up ———-

        Assuming the NJ Officer’s pensionable pay was your $121,177, the CA Officer’s pensionable pay would only need to be $75,736 for the CA Officer’s pension to have a “value” equal to that of the NJ Officer because:

        75% x $121,177 x 1.00 = $90,883, and
        90% x $75,736 x 1.33 = $90,883

        All very interesting, but we’re still simply comparing 2 Public Sector Police Officer pensions, BOTH of which are grossly excessive, and TYPICALLY 4 to 6 times greater in value upon retirement than that of an equally paid Private Sector worker who retires at the SAME age, and with the SAME years of service.

        And with the Taxpayer being responsible for 80% to 90% of total Plan costs, THAT’s the problem.

        Reply this comment
  24. S Moderation Douglas
    S Moderation Douglas 16 October, 2016, 00:51

    This isn’t “my town”. This is the nearest “big city” we go to for healthcare, major shopping, and better restaurants.

    http://transparentcalifornia.com/salaries/search/?a=modesto&q=police+officer&y=2015&s=-base

    They pay their officers a little better than ours, in fact, this is the town about which a recent article was written about competition for officers.

    http://www.modbee.com/news/local/news-columns-blogs/jeff-jardine/article101489732.html

    “… and as Modesto learned when it lost 18 officers to agencies over the hill, the Bay Area departments will treat the Modesto Police Department similarly.”

    “over the hill” is Hayward, where police officer tops out at $111,,000.

    Commute 75 miles each way, for $30k+ a year? Or stay put and try to promote to lieutenant?

    We get that in your opinion police officers are overpaid. Sorry, that’s what police officers cost.

    TL: “Somehow I doubt that “typical” 20-year-service CA Police officers (State or Local) have a base pay of $68,629, and I bet that Transparent California would show that to be true.”

    You caught me! 68629 is actually the pin number for my ATM card!

    Transparent California lists 45 “Police Officer” positions in my town. The highest 25 are $68,627 +/- $3. The police chief is $179,463.00.

    No, wait… that’s my bank routing number. Why do you think I would make this shite up?

    Reply this comment
    • Tough Love
      Tough Love 16 October, 2016, 07:49

      S Moderation Douglas,

      Using your link, it didn’t take me long to see how you are using misleading #s.

      The high listed “regular” (or base) pay is $79,942.00, and with 12 “Police Officers” getting that same pay, it’s pretty clear that it’s the high-scale ONLY for those in the lowest rank….”patrolman”. Also proven when I change the Search criteria to “Police Chief” and 1 person comes up with a base pay of $183,906.00.

      Pensions are based on the final (or final average) salary, and I’d wager a guess that MOST Police Officers in CA retire above the rank of Patrolman …………. and for those who were NEVER promoted, they were likely so marginal or incompetent that they should have been terminated early in their careers (as they assuredly would have been if working in the real world, the PRIVATE Sector).

      So in your earlier comment, a CA Police Officer pension based on … “90% of $68,629.00” …. is about as BS as it gets.

      Reply this comment
      • Tough Love
        Tough Love 16 October, 2016, 07:54

        SMD,

        Oh, and so as to not let you divert the readers attention from what must be our FOCUS, I repeat the following:

        ———————————-

        All very interesting, but we’re still simply comparing 2 Public Sector Police Officer pensions, BOTH of which are grossly excessive, and TYPICALLY 4 to 6 times greater in value upon retirement than that of an equally paid Private Sector worker who retires at the SAME age, and with the SAME years of service.

        And with the Taxpayer being responsible for 80% to 90% of total Plan costs, THAT’s the problem.

        Reply this comment
  25. S Moderation Douglas
    S Moderation Douglas 16 October, 2016, 10:25

    TL: ” I’d wager a guess that MOST Police Officers in CA retire above the rank of Patrolman ……”

    TL: “Somehow I doubt that “typical” 20-year-service CA Police officers (State or Local) have a base pay of $68,629

    TL: “…. and for those who were NEVER promoted, they were likely so marginal or incompetent that they should have been terminated early in their careers (as they assuredly would have been if working in the real world, the PRIVATE Sector).”
    ………………………………………………………………………………………………………….
    You shore do a lot of wagerin’ and guessin’. Bring some substantiation. Moderation guesses that MOST police officers never promote into management level jobs.

    Most private sector workers don’t promote into management positions either. That does not mean they are marginal or incompetent.
    ……………………………………………………………………………………………………………
    ” from what must be our FOCUS, I repeat the following:”
    I repeat the following:
    I repeat the following:
    I repeat the following:
    I repeat the following:
    I repeat the following:
    I repeat the following:
    I repeat the following:
    ad nauseating

    Public Sector Police Officer pensions are grossly excessive,
    …………………………………………………
    Obviously, continually repeating something doesn’t make it so.
    In TL’s opinion, police officers are overcompensated. Yet there are always cities ready, willing, and eager to offer more.

    Reply this comment
    • Tough Love
      Tough Love 16 October, 2016, 14:31

      Yes SMD …………

      When Police Officer pensions have a”value upon retirement” that is ROUTINELY 4 to 6 times that typically granted Private Sector workers (in jobs with comparable risks, and requiring comparable experience, education, knowledge, and skills) who retire at the SAME age, with the SAME pay, and the SAME years of service ….. ……. as they do right now ….. they are indeed GROSSLY EXCESSIVE.

      Not even debatable.

      Reply this comment
      • Tough Love
        Tough Love 16 October, 2016, 14:58

        SMD,

        It’s not just me “claiming” that 4 to 6 times Police vs Private Sector pension relationship, it’s documented and published.

        I have stated many times (and verified by my own calculations … being qualified, educated, experienced, & trained to do such calculations. No, I’ve wasn’t a light-bulb-changer.) that Public Sector non-Safety worker Final Average Salary DB pensions are ROUTINELY 3 to 4 times (rising to 4 to 6 times for Safety workers) greater in value upon retirement than those typically granted Private Sector workers (in jobs with comparable risks, and requiring comparable experience, education, knowledge, and skills) who retire at the SAME age, with the SAME pay, and the SAME years of service.

        Here what the CATO Institute came up with:

        “State and local workers typically receive more generous benefit packages than do private-sector workers. On average, retirement benefits for state and local workers cost $4.80 per hour, compared to $1.23 per hour for private-sector workers. Insurance benefits (mainly health insurance) for state and local workers cost $5.43 per hour, compared to $2.59 per hour for the private sector. Most state and local workers receive retirement health benefits, whereas most private-sector workers do not.”

        And the COST of a pension is directly proportional to the pension’s GENEROSITY.

        The CATO Public/Private Sector cost multiple is 4.80/1.23 = 3.90, but that 3.90 times more COSTLY (and hence more GENEROUS) PUBLIC Sector pensions is for ALL workers (both Non-safety and Safety) combined, and with 5 to 10 times more non-Safety than Safety workers, not only does my 3 to 4 times for non-Safety workers and 4 to 6 times for Safety workers look consistent, but it appears more likely that I have UNDERESTIMATED (than OVERSTATED) that PUBLIC vs PRIVATE Sector pension multiple.

        Reply this comment
        • S Moderation Douglas
          S Moderation Douglas 16 October, 2016, 16:47

          … it’s documented and published.

          SMH

          http://www.englishoutsidethebox.com/wp-content/uploads/2015/10/photo-oct-27-4-22-50-pm.jpg

          The “state and local workers cost $4.80 per hour, compared to $1.23 per hour for private-sector workers.” quote came from

          “Fiscal Policy Report Card on America’s Governors 2016″

          It was comparing *all* public workers to *all* private workers, not equivalent workers, and it is comparing benefits outside the context of total compensation.
          * * * * * * * *
          Here’s what else the Cato Institute* said:
          ” In 2015 federal workers earned 76 percent more, on average, than private-sector workers.”

          and

          ” In 2015 federal workers enjoyed average annual benefits of $36,795, which compared to average benefits in the private sector of just $11,175.”

          What does Biggs say about this?…

          “A new report from the Cato Institute concludes that federal government employees are paid salaries 78% higher than the average private sector worker. That’s the number that’s generating headlines. And it’s basically wrong.”
          “But critics are right when they say that federal-private pay comparisons absolutely must control for differences in the factors, like education and experience, that affect salaries. If I were a federal employee, I would push back hard on the 78% headline pay difference number.”

          See also…

          http://washingtonmonthly.com/2015/10/14/is-cato-right-are-federal-employees-overpaid/

          “Cato’s study is precisely right—except for where it’s dangerously wrong.”
          “It’s precisely right because the average wage in the federal government is substantially higher than in the private sector. It’s dangerously wrong because the study completely misses the fact that the average federal job is wildly different than the average private sector job.”
          ……………………………………………
          *Cato Institute… specifically, Chris Edwards, in both misleading “reports.”

          Reply this comment
          • Tough Love
            Tough Love 16 October, 2016, 18:03

            SMD,

            And your point … other than again trying to distract the readers from what must remain the FOCUS of their attention ?

            As I stated above …………..

            All very interesting, but we’re still simply comparing 2 Public Sector Police Officer pensions, BOTH of which are grossly excessive, and TYPICALLY 4 to 6 times greater in value upon retirement than that of an equally paid Private Sector worker who retires at the SAME age, and with the SAME years of service.

            And with the Taxpayer being responsible for 80% to 90% of total Plan costs, THAT’s the problem.
            ———————————————–
            What Taxpayers must DEMAND is:

            (a) a hard freeze (ZERO future growth) of the DB pensions for the future service of all CURRENT Public Sector workers ….. just to STOP digging the financial hole we are in DEEPER every day, and

            (2) Recognizing that PAST service accruals of BOTH those already retired and those still active are no less GROSSLY EXCESSIVE than would be a continuation of the current DB Plans for FUTURE service, determine how much additional money would be needed to amortize the unfunded liability over no more than 20 years. If those funds cannot be raised WITHOUT material tax increases or service reductions, then reduce the promised pensions to the level (but no less than) the pensions that like would have been granted had our self-service/taxpayer-betraying elected officials NOT been BOUGHT with Public Sector Union campaign contributions and election support.

            And a good proxy for the latter is the pension amount (and full/unreduced retirement ages, and ZERO COLAS) typically granted comparable PRIVATE Sector workers.
            ——————————————-

            EQUAL ….but NOT better.

          • S Moderation Douglas
            S Moderation Douglas 16 October, 2016, 20:16

            trying to distract the readers?

            “It’s not just me “claiming” that 4 to 6 times Police vs Private Sector pension relationship, it’s documented and published.”

            Documented

            Published

            and

            “…it’s basically wrong.”

            Tough Love cites the Cato Institute.

            Moderation says the Cato Institute is wrong.

            Andrew Biggs says the Cato Institute is wrong.

            Washington Monthly says the Cato Institute is wrong.

            Factcheck.org says the Cato Institute is wrong.

            Government Executive.com says the Cato Institute is wrong.

            Ad infinitum.

            That’s not a distraction, Love. That’s a correction.

      • T Mind of your Ted Godhead System
        T Mind of your Ted Godhead System 18 October, 2016, 09:09

        Zzzzzzzz yaaaaaawn—- TL— after all of these years and after all of your not persuasive same ol mantra dull normal argumentum—- you still simply advocate the unlawful, un Constitutional welching of lawful contracts post performance —— Yawn

        hurry— throw up more drivel……now……3,2…..1

        Reply this comment
        • Tough Love
          Tough Love 19 October, 2016, 00:16

          Yea Ted, it’s hard for you to fathom getting SO MUCH less …. pensions in an amount only EQUAL to that typically granted to Private Sector workers.

          Reply this comment
          • T Ted America
            T Ted America 19 October, 2016, 08:53

            LOL No TL— I can fathom people like you urging unlawful unconstitutional debt welching—- lol—— it’s your tea baggy thing little buddy!

            make America great again! indeed!!!!!!!!!!! What makes me just laugh and frankly ENJOY this is that I have been watching you mary’s do this dance for YEARTS with ZERO legal success! KINDA FUN!!!!!!!!!!

  26. S Moderation Douglas
    S Moderation Douglas 16 October, 2016, 10:30

    Quoting Ulysses Uhaul, 14 October, 2016, 23:58

    You will pay for any pension shortfall…end of thread-

    https://c1.staticflickr.com/5/4128/5172590549_5ce253cbde_b.jpg

    Reply this comment
  27. TB
    TB 16 October, 2016, 18:36

    Better yet:

    1) Fold all taxpayer contributions to their pensions into social security

    2) Issue a lump sum payment to every public employee, both active and retired, for their contributions

    3) Dissolve all public pensions

    4) Each public employee will now receive what the private sector gets called social security, with the payout being equal to what their pension was paying capped at the social security maximum

    Just as I propose here:

    https://drive.google.com/file/d/0B90sU3A85q46OE9BZHJFSWEzbGM/view?usp=drivesdk

    Fair?

    Reply this comment
    • Tough Love
      Tough Love 16 October, 2016, 20:02

      I’m looking for something that is certainly a big stretch-goal, but PERHAPS doable with a change in Legislative leadership and the appropriate Constitutional amendments.

      Your list is WAY beyond even what I believe to be fair.

      Reply this comment
  28. Ulysses Uhaul
    Ulysses Uhaul 16 October, 2016, 19:06

    Yes….Uly is a truthsayer. Not a vision……not a mirage……FACT.

    Only poly pants doomers are delusional…….

    Pensions guaranteed by taxpayers.

    End mercifully of this bizaro thread!

    Reply this comment
  29. TB
    TB 16 October, 2016, 20:20

    Wow even too tough for Tough Love lol! Eventually the numbers will force us down a path like this. They never should have passed Pandora’s Box known as SB400 in California!

    Reply this comment
    • Tough Love
      Tough Love 16 October, 2016, 21:41

      Of course SB400 should NOT have been passed …… besides the completely unjustifiable RETROACTIVE implementation of the increases, but also, by the time is was being voted upon, the DOT COM bubble had ALREADY burst and even the PHONY #s supposedly supporting the increases were no longer valid.

      Reply this comment
      • S Moderation Douglas
        S Moderation Douglas 17 October, 2016, 07:05

        AB 400 was passed and signed in 1999. The law became effective Jan 1, 2000.

        The dot com bust occurred in March of 2000.

        Reply this comment
        • Tough Love
          Tough Love 17 October, 2016, 07:41

          SMD,

          In this case I was mistaken and you are correct (I suppose that will happen …….. occasionally).

          I was confusing CA’s retroactive increase in 1999 with the similar but smaller across-the-board and also RETROACTIVELY applied Public Sector pension increase in NJ (my home State) that took place in 2001.

          Reply this comment
          • S Moderation Douglas
            S Moderation Douglas 17 October, 2016, 10:46

            To be fair…

            In my humble opinion, you often post or repeat comments without doing a simple fact check. And readers, much like TB, accept these “opinions” and echo them. There often is a gray area that no one wants to see.

            For a little perspective, I somewhat recommend Ed Rings article:
            “Saving Defined Benefits Requires Lower Pensions for Existing Workers and Retirees” Unionwatch, Dec. 6, 2012*

            In a nutshell, there are real advantages to a DB system.
            They are not a Ponzi scheme.
            They are not a pyramid scheme.

            “And comparing defined benefits – or social security, for that matter – to Ponzi schemes or Pyramid schemes are specious arguments that do not belong in serious debate.”
            ———————————————
            Having said that…
            If you will stand by for the gray area, I will say this; SB400 was passed before the dot com bust, but, oddly, even in California, the state cannot impose a benefit change upon the union workers; even a benefit improvement. It had to be “negotiated” and ratified by the unions. (The state could and did increase benefits for management and other non represented employees.)
            I am shooting from memory here, but I recall mail in ballots asking us to agree to a benefit increase and specifically stating there would be no increased cost to us, the members. I don’t remember the exact dates, but it had to have been after the beginning of the market bust.

            Gray area: at this point, I don’t think anyone realized how far the bust would go.

            Also, obviously, the state could not impose greater benefits on local governments, either. SB400 ‘allowed’ the benefit increase. It could not ‘mandate’ them. They had to be approved by each government and it’s unions. All of this would have been while the market continued to fall.

            Side note… At this time, pensions were just about the farthest thing from Moderation’s mind. I looked at the information supplied by CalPERS; I had always assumed I would retire at 65, like most other people I knew, and, according to the charts, this would increase my pension by about 3%. Meh. I don’t even recall if I mailed in my ballot, but obviously, the increase was ratified.

  30. TB
    TB 16 October, 2016, 21:53

    The corrupt politicians in bed with the corrupt union bosses never in a million years thought that this Ponzi scheme would have been exposed, and now will do anything in their power to protect, even at the expense of society.

    Reply this comment
  31. TB
    TB 17 October, 2016, 10:55

    I agree DB plans are beneficial, that’s why I propose that everyone will get the greatest of DB plans in existence, it’s called Social Security.

    Reply this comment
  32. Tough Love
    Tough Love 17 October, 2016, 12:41

    Quoting SMD ……………..

    “For a little perspective, I somewhat recommend Ed Rings article:

    “Saving Defined Benefits Requires Lower Pensions for Existing Workers and Retirees” Unionwatch, Dec. 6, 2012*”
    —————————————————————
    I also recommend reading that article … including the comments, noting that in one comment, Ed Ring agreed with my observation that those …. “Lower Pensions for Existing Workers and Retirees” …. need to be “significant”.

    The referenced article can be found here:

    http://unionwatch.org/defending-defined-benefits/

    Reply this comment
  33. S Moderation Douglas
    S Moderation Douglas 17 October, 2016, 15:11

    I don’t entirely disagree. Incidentally, I have read and quoted that article several times and just now noticed it was written in 2012. For all I know, he might have changed his opinion on DB pensions in the last four years. As I recall, some other authors in CPC and related think tanks advocate eliminating DBs. I

    By “For a little perspective” I meant that, for those who blindly insist on a DC, there are plenty of experts (on both sides of the debate) who say that, for the same cost, a DB system can give a superior retirement.

    Even if one insists that the employer should contribute no more than 5-6% of salary, that 5% would give a higher return and better security in a DB plan. And yes, that pension would be much lower than most public plans today. Maybe even less than half

    Society of Actuaries, Jan., 2005
    “Defined Benefit Plans vs.
    Defined Contribution Plans”
    by Mark Ruloff

    DC plan:
    Bad for participant.
    Bad for plan sponsor in the long run.
    Bad for society in the long run.

    DB plan
    Good for shareholder value.
    Good for participants.
    Good for society

    The knee jerk “Ponzi scheme” claims and public employee demonization are counter productive.

    Reply this comment
    • Tough Love
      Tough Love 17 October, 2016, 19:07

      SMD, Thank you for a very constructive comment.

      Quoting a portion ……

      “By “For a little perspective” I meant that, for those who blindly insist on a DC, there are plenty of experts (on both sides of the debate) who say that, for the same cost, a DB system can give a superior retirement. Even if one insists that the employer should contribute no more than 5-6% of salary, that 5% would give a higher return and better security in a DB plan. And yes, that pension would be much lower than most public plans today. Maybe even less than half “.
      ——————————————

      It’s pretty obvious from my many comments here and elsewhere that I advocate (collectively, for all employees taken as a group) for EQUAL Private/Public Sector “Total Compensation” in comparable jobs, and whether that is delivered via DB or DC is far less important to me (as a Taxpayer).

      And, there indeed ARE certain advantages to DB vs DC Plans (for many people), the primary one being mortality sharing. A single life annuity will pay out until you die (or a reduced-payout Joint & Survivor Annuity until the 2-nd death), yet is “priced” based on the average life expectancy of the entire group of annuitants. An informed DC Plan participant should understand that they need to manage the withdrawal of DC fund investments assuming that they live perhaps 10 years BEYOND life expectancy (longer if health and family history suggests a very long life).

      But simply for financial completeness, when ALL mortality elements of both approaches are factored in, the cost is not materially different. The DC group (while taking lower monthly payments while alive) will, on average STILL die at their tabular life expectancy, thereby leaving unused assets to their heirs. That bequest is very near mathematically equivalent to the accumulated value of the excess of the higher DB annuity payments over the lower DC withdrawals assumed taken so as to extend the fund’s lifetime for 10 years beyond life expectancy. So yes, a DB Plan can deliver “superior retirement” in the sense of greater monthly payments while you are alive (understanding that unlike in a DC Plan, no assets will remain after death). However, it should be noted that wealthier individuals (who have sufficient sources of income w/o a DB pension) might be better off with a DC Plan, where the smaller required DC Plan withdrawals in the earlier years yields a tax savings.

      Another benefit of DB Plans is not having to be responsible for one’s investments, which will become more burdensome/difficult as one ages. And of course the “professional” investment management of DB Plan assets should (theoretically) lead to somewhat higher returns … though to a lesser extent today than in past years due to the ease of structuring a balanced portfolio of very low-fee ETFs.

      Simply for the sake of THIS one discussion, let’s assume that Public/Private Sector “wages” are very close, in which case equal Pensions & Benefits would satisfy my objectives …. noting that increases (decreases) in Public Sector pensions and/or benefits can offset lower (higher) Public Sector wages, should a wage differential actually exist.

      Assuming equal “wages”, and a goal of equal “Total Compensation”, Public Sector DB pensions would have benefit levels determined from taxpayer contributions comparable to what Private Sector taxpayers typically get from their employers (3% up to perhaps 5% of pay) and investment earnings based on reasonably conservative interest rate assumptions (considerably lower than the 7% to 8% typically assumed today in Public Sector Plans).

      The “problem” with this structure (from the Public Sector worker’s perspective) is that the benefit level so determined would indeed be lower (FAR FAR lower) than the benefit levels promised today…… likely 1/4 to 1/3 as generous for non-safety workers and 1/5 as generous for Safety workers. Of course those reductions in the monthly DOLLAR payout need not be so severe if the OTHER elements of currently structured Public Sector plans were revised. For example, implement FULL actuarial reductions for collecting one’s pension before age 65 and the above reduction decreases. End COLAs, noting that Private Sector Plan don’t include them, and the reductions get even smaller. Implement both changes and Public Sector pension payouts would likely STILL need to be reduced by OVER 50%….. simply because the basic Public Sector “formulas” are so generous and hence costly (FAR more than a level annual 3% to 5% of pay).

      Which of course leads us to the position many Public Sector workers take …… that THEIR pensions & benefits aren’t to generous, it’s that Private Sector retirement Plans are simply too small.

      But that in fact is what WE in the Private Sector get, and it’s not going to change. Private Sector employees (even when in Unions) have very little say in determining their compensation …… MATERIALLY different than in the Public Sector where Elected Officials (with the power to grant pay, pensions, and benefits) are easily swayed with Union campaign contributions and promises of election support. And with 85% of all workers employed in the PRIVATE Sector, it’s had to argue that PRIVATE (not PUBLIC) Sector “Total Compensation” is the proper determinant of “Market Rate Compensation”.

      So while the journalists are correct in pointing out that the Private Sector is woefully unprepared for retirement (and better start saving mightily if they ever plan on retiring), granting Public Sector workers (who I am in this example assuming make “wages” equal to their Private Sector counterparts) greater pension and benefits which requires higher taxes (today or tomorrow) only exacerbates the situation for Private Sector workers.
      ————————————————–
      No matter how this Public Sector pension mess shakes out, there is a great deal of collective financial pain headed our way………… “our” meaning for BOTH the taxpayers and Public Sector workers/retirees.

      Reply this comment
  34. Ulysses Uhaul
    Ulysses Uhaul 17 October, 2016, 16:49

    Have you ever ever read so much contorted misinformation?

    Like climate change settled science…folks…..taxpayers pay pension shortfalls….

    Reply this comment
  35. TB
    TB 17 October, 2016, 17:12

    I hope for your sake Ulysses you are right – but I highly doubt it. You may want to start saving for the day when your pension could go away.

    Reply this comment
    • Tough Love
      Tough Love 17 October, 2016, 19:31

      Form your prior comment, you do not appear to be a Public Sector worker/retiree, so curiously, why do you hope he is right (that taxpayers will pay for pension shortfalls)?

      Is it reasonable, fair, or appropriate for Taxpayers to be (as they now are) responsible for 80% to 90% of the total cost of Public Sector pensions that are ROUTINELY 3 to 4 times (4 to 6 times for safety workers) greater in value upon retirement than those typically granted Private Sector workers who retire with the SAME pay, at the SAME age, and with the SAME years of service?

      I certainly do NOT think so.

      Reply this comment
  36. Bronson
    Bronson 17 October, 2016, 19:49

    Dear Mr. Problem Solver, There is a retired cop near us who is a total asshole. His wife looks and dresses like Hillary. She is a rotten bitch too. I don t want to move and I want them to disappear. He has been retired forever. I am told he retired on a heart disability, but the bastard goes dirt biking all the time. He also rides a motorcycle with the thick thighed pig behind him. Should I deflate the front tire?

    Reply this comment
  37. TB
    TB 17 October, 2016, 20:34

    Good point Tough Love let me clarify, I said for “his” sake, certainly not ours as abused taxpayers. That’s why I said he should start saving now. Also, that’s why I am proposing combining all of the public pension assets contributed by taxpayers to be put into the Social Security Reserves and have all public employees, just like the rest of us, to get their DB payments. Hope that helps.

    Reply this comment
    • t Mind of your Ted Godhead System
      t Mind of your Ted Godhead System 18 October, 2016, 09:18

      LOL TB—- This is soooo fun

      How did he “abuse taxpayers”

      you mean by entering into a contract with them for work, doing the work, and getting paid?

      LOL
      sorry little buddy…..

      Reply this comment
      • Tough Love
        Tough Love 18 October, 2016, 11:39

        With Public Sector pensions ROUTINELY 3 to 6 times greater in value upon retirement than those of similarly situated Private Sector counterparts, and with the Taxpayers responsible for all but the 10% to 20% of total Plan costs actually paid for by the workers, and with those undeniably grossly excessive pension promises clearly the result of collusion between the Public Sector Unions and our elected officials with the former BUYING the favorable votes (on pay, pensions, and benefits) of the latter with campaign contributions and election support …….. that indeed constitutes Taxpayer ABUSE.

        Reply this comment
  38. Ulysses Uhaul
    Ulysses Uhaul 18 October, 2016, 08:13

    Long posts are signs of deep deep seated insecurity by basement doomers in Detroit Lions pajamas……

    This thread volume shows greedy doomers will stop at nothing to screw pensioners making them forever dumpster divers.

    Proud of yourself?

    Reply this comment
  39. TB
    TB 18 October, 2016, 09:09

    Exactly – the problem is so severe that it will require an act of Congress!

    Reply this comment
  40. Ulysses Uhaul
    Ulysses Uhaul 18 October, 2016, 16:59

    Teddy

    Been lying low on this pathetic fraudulent thread knowing you and SAW would expose these uninformed greedy doomers.

    See Queeg is cranking up lately on CWD.. Been a bit slow in the rental yard and had to cut his excessive overtime hours, for doomers are really worried about this election and holding up moving to Redneck Utopias!

    We have an election special: we will throw in 30 moving boxes from Cambodia and four rolls of packing tape from Honduras…..now that’s a awesome deal!!!!

    Reply this comment
    • Tough Love
      Tough Love 18 October, 2016, 20:35

      quoting Ulysses Uhaul ………

      “uninformed greedy doomers”

      Now THAT’S amusing coming from a PUBLIC Sector worker/retiree ……… very few of whom aren’t insatiably greedy and with a taxpayer-be-damned attitude..

      Reply this comment
  41. TB
    TB 18 October, 2016, 21:26

    Touché TL – one can only hope that some day their arrogance, smugness, entitlement, and outright selfishness will come crashing down on them when their pension checks are slashed by at least 50% and their medical benefits are completely eliminated (e.g. Stockton). I predict this will happen in the next 5 years.

    Reply this comment
    • Tough Love
      Tough Love 19 October, 2016, 00:07

      The first major reduction in pension payouts will put the fear of God in those who still feel so invincible.

      Had it not been for the desire to save the Detroit Institute of Art’s collections …. and the hundreds of Millions of Private donations to do so, we would have ALREADY had that happen.

      It WILL come, but it’s difficult to determine WHEN.

      Chicago may be next.

      Reply this comment
      • Teddy
        Teddy 19 October, 2016, 08:59

        I remember years ago I used to force these pension trolls like Tough Love to predict the date calpers would default—– they squirm, and guess, and yak, and squirm, and guess……it was fun— all of these years later—– it never gets old!

        Reply this comment
  42. Ulysses Uhaul
    Ulysses Uhaul 19 October, 2016, 01:36

    Calif in much much better shape than Illinois, New Jersey, Rhode Island, so a long way to go redistributing fair share to pensioners, hard working immigrants, kids and homeless.

    You doomers are selfish. In most cases a couple dollars a day will bring to an end human suffering among you. 122,000 thousand households in Orange County at risk floundering in poverty……and “The OC” is supposed to be tony, hot affluent.

    Other counties are worse off…..the problem is manufacturing has been gutted by NAFTA, Paul Ryan, Globalists, New World Order pillagers, tech trinket makers, corporate food and big box store barons. How can you support such policies. Can’t you see and feel the rot and decay around you.

    Soon….very soon….your current car will be your forever car and your standard of living will be few consumer choices, your kids will rent in squaller, high food and energy costs, retail gouging due to monopolies….

    ……you’re not on the gravy train….you’re their next target unless you work to uplift all residents for the common good!

    Reply this comment
    • Tough Love
      Tough Love 19 October, 2016, 08:07

      Ulysses Uhaul,

      We indeed should work on uplifting the hurting masses in the Private Sector.

      It’s going to take a long time, even if possible, and there is ZERO justification for Public Sector workers to get …oh SO MUCH MORE …. while we travel that path.

      Reply this comment
      • Ted. Mentor to the doomed....
        Ted. Mentor to the doomed.... 19 October, 2016, 09:01

        LOL TL– here’s the justification— it’s the deal you made so you could get those workers to work for you! lmao

        now you don’t wanna pay! I love CWD and the pension envy trolls!

        Reply this comment
        • Tough Love
          Tough Love 19 October, 2016, 09:06

          Ted,

          BS …. those deals were BOUGHT from our Elected Officials with Public Sector union campaign contributions and election support.

          Such grossly excessive compensation (far in excess of “market rate” compensation as determined by what the 85% of workers in the Private Sector get when doing comparable work) was never necessary, just, fair to Taxpayers, or affordable.

          Reply this comment
        • Ulysses Uhaul
          Ulysses Uhaul 19 October, 2016, 09:44

          Teddy

          These may be the deplorables who may need re-education camp to reach their inner social conscience or something…..gives one the shudders they are out there.

          Reply this comment
          • Tough Love
            Tough Love 19 October, 2016, 11:35

            You and Ted should join in with Trump …. then we would really have the 3 stooges.

  43. Bronson
    Bronson 19 October, 2016, 04:00

    I deflated the front tire. Wednesday is a tandem ride. This is going to be a good day.

    Reply this comment
  44. Ulysses Uhaul
    Ulysses Uhaul 19 October, 2016, 16:46

    End this misery. And Tough Love…..your pal Hillary will clean you out, cut your internet and outsource your existence….so there-

    Reply this comment
  45. TB
    TB 19 October, 2016, 23:50

    Wow Ulysses you and I are aligned politically – strange world!

    Reply this comment
  46. Ulysses Uhaul
    Ulysses Uhaul 20 October, 2016, 19:18

    Think on it…defend yourself….preserve life. Worship if you please. Have faith in your country. What wrong with these basics

    Reply this comment
    • Tough Love
      Tough Love 20 October, 2016, 21:45

      You left out your support of the insatiably greedy Public Sector workers (via their unnecessary, unjust, unfair, unaffordable, and undeniably grossly excessive taxpayer-funded pensions & benefits) ….along with a Taxpayer-be-damned attitude.

      And for you, “preserve life” likely means being against a woman’s right to choose …. which I do support.

      And yes I support the 2-nd amendment and am a gun enthusiast … within reason. What’s wrong with background checks for ALL gun purchases (including the giant loophole …gun shows)?

      Reply this comment
      • Tough Love
        Tough Love 20 October, 2016, 21:50

        P.S. Trump made a fool of himself …. again. But I doubt there will be a problem. He’s going to lose by such a wide margin, he will ultimately concede.

        I wonder what they’re gonna call Bill Clinton….. the First Gentleman (hardly seems appropriate)?

        Reply this comment
  47. TB
    TB 20 October, 2016, 22:44

    Isn’t America GREAT! Where else on Earth could we be speaking so openly like this. We have to protect our Republic.

    Reply this comment

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Steven Greenhut

Steven Greenhut

Steven Greenhut is CalWatchdog’s contributing editor. Greenhut was deputy editor and columnist for The Orange County Register for 11 years. He is author of the new book, “Plunder! How Public Employee Unions are Raiding Treasuries, Controlling Our Lives and Bankrupting the Nation.”

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