Alleged CalPERS Corruption

John Seiler:

How much more of this are Californians going to take? Will another tax increase be needed?

The L.A. Times reports:

In a scathing report, a former chief executive of the California public employee pension fund was accused of pressuring subordinates to invest billions of dollars of pension money with politically connected firms.

A 17-month investigation also found that Federico Buenrostro Jr. — along with former pension fund board members Charles Valdes and Kurato Shimada — strong-armed a benefits firm to pay more than $4 million in fees to consultant Alfred J.R. Villalobos, who later hired Buenrostro.

The report, prepared for the California Public Employees’ Retirement System by Washington law firm Steptoe & Johnson, comes amid widening attacks on public employee pension funds in California, Wisconsin, Iowa and other states for providing lavish benefits that cash-strapped governments can no longer afford.

California taxpayers, of course, are on the hook for any losses at CalPERS that drop its value below that of its ability to pay government-employee retirees.

CalPERS already lost more than $10 billion in bum real-estate investments.

So, here’s how the system works if you’re a taxpayer:

* Your 401(k) drops in value. So your retirement will be much reduced. Social Security also has problems, so that probably will be cut as well.

* Your taxes also will be raised to make sure government employees continue to receive luxurious retirements.

The system is unfair and obviously needs to be reformed in two ways:

1. All current government employees should be put on 401(k)-type systems.

2. The retirement pay of existing retirees should be cut to meet the value of the actual investments of CalPERS, CalSTRS and other systems. No more raids on the general fund, which are paid for by taxpayers.

March 15, 2011

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  1. StevefromSacto
    StevefromSacto 15 March, 2011, 10:46

    Average pension paid out by CalPERS is less than $25,000 a year. And many of the people who receive these pensions don’t receive Social Security benefits.
    Luxurious retirements? I don’t think so.

    Yes, there are individuals who receive erxtravagant pensions. Those should be cut back. Indeed, I don’t think any public employee should receive a six-figure retirement, no matter what. And other abuses like pension spiking should be stopped, period.

    But you continue to perpetuate the myth that the majority of public employees, as you put it in another post, “have $200,000 pensions and live in Idaho.” That’s kind of like the mythological “welfare Cadillac” that the right wing has made so popular over the years.

    How many public retirees have $200,000 pensions, John? Do you have a number for us? Or do you not want to confuse people with the FACTS?

    Reply this comment
  2. John Seiler
    John Seiler 15 March, 2011, 11:44

    StevefromSacto: As you well know, that $25,000 yearly figure is an average, and includes those who work for a couple of years and get $5,000 yearly pensions, before moving on to some other job.

    This all is explained on Ed Ring’s piece right here on

    Moreover, even graduates of California’s government schools can do the math: 3% (for each year) at 50 (years old) means: Work for 30 years; multiply that by 3 = 90%. If your last year’s salary is $120,000, then your retirement pay is $108,000 a year. Plus medical benefits so generous they’re also bankrupting the state, according to Democratic Controller John Chiang in his report yesterday:

    It’s not a “welfare Cadillac.” It’s a pension Mercedes.

    As to those making in the $200,000 pension club, I’ll get you a number on that. In the meantime, here’s what CBS13 in Sacto, your hometown, reported on the $100K Club (source:



    School districts across California are planning teacher layoffs, while pensions are getting bigger for a growing number of retired school officials. The list of retired teachers and administrators collecting six-figure pensions has grown by 70% in the last year and a half.

    There are now more than 5200 people in the club, according to California Foundation for Fiscal Responsibility, a Citrus Heights group warning taxpayers that the CalSTRS pension fund is in deep trouble.
    In reviewing the list, CFFR president Marcia Fritz observed, “The top is making $296,555. The second is $290,484.”

    And those retired school officials will continue collecting those annual pensions until the day they die. Last year, members of the $100,000 club took home a collective $630 million in payouts from the California State Teachers Retirement System, a fund with at least $40 billion in unfunded obligations.

    Reply this comment
  3. stevefromsacto
    stevefromsacto 17 March, 2011, 22:12

    The $25,000 figure also includes retirees who have worked for the state for 30 years and receive less than $20,000 a year in benefits. Why do you dismiss the thousands of state workers in low paying jobs, like janitors and health care aides? It’s easier to make an example of the 5,200 people out of 400,000 plus who are in your so-called six figure club.

    By the way, John, if you do the math: $200,000 x 5,200 = $10.4 million annually. So that would mean that members of your club would have to receive their six figure pensions for 63 YEARS before it would equal the “$630 million” in payouts you claim has been paid to these fortunate few by CalSTRS. It amazes me how you guys can just throw the most outlandish figures around and not get challenged for them.

    Reply this comment
  4. stevefromsacto
    stevefromsacto 17 March, 2011, 22:18

    I screwed up big time on my previous post. That’s what I get for using a cheap calculator. You are probably correct about the $630 million figure. My bad.

    But I still stand by the first paragraph.

    If you want to “punish” the 5,200 for being successful, go for it. As I said previously, no one should make over a six-figure pension in public service period, including the governor. But the Pension Mercedes is no more accurate for the overwhelming majority of state workers than the Welfare Cadillac was for people on food stamps or AFDC.

    Reply this comment
  5. Guess what
    Guess what 15 November, 2012, 00:15

    Don’t worry about math Mr. Seiler, spelling is more important. Try this word, “contract” as in legal binding vested
    C-O-N-T-R-A-C-T for retirees.

    Reply this comment
  6. CalWatchdog
    CalWatchdog Author 15 November, 2012, 08:00

    To Guess what: There’s no contract if there’s no money. It’s spelled: B-R-O-K-E.

    — John Seiler

    Reply this comment

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