Never fly. Discriminatory and unconstitutional.

2) Withhold the amount from current employee salaries the amount of money it will take to pay present and future benefits

Subject to collective bargaining. Also you have to raise wages substantially or you would no workforce. This would essentially be a 40% wage cut.

1) Tax all public employee pensions over 40,000 $ at a 90% rate

Or

2) Withhold the amount from current employee salaries the amount of money it will take to pay present and future benefits

That would defacto either reduce the amount current pensioners draw or current employees will pay for current & future benefits ?

If the Legislature & Governor would put that on the table ?

Maybe Public Employees would renegotiate in good faith a equatable solution to the pension tsunami ?

First, the public in general is not always aware that every pension that is managed and administered by CalPERS does not belong to a State employee. A significant number of these pensions are for the employees of Counties, Local Municipalities, and Special Districts throughout California. These government entities contracted with CalPERS to administer their pension plans, and most importantly these pension plans are the very plans in the greatest financial distress. The pension payouts for these plans are in many cases more generous than the standard CalPERS pension received by a State employee. Many of these non public safety employees receive a 2.7 at 55 pension payout. Until recently your standard State employee (Non Public Safety) would receive a 2.5 at 55 pension payout.

Second, the salary schedules granted to most of the employees of contracted agencies is much more generous than the salary package received by a State employee in the same or very similar occupation. This point of fact is especially applicable when public safety and non public safety positions are compared. Remember the Cal-Trans executive who recently left State service to take over a large Southern California Transportation Authority? He negotiated a three-year deal and the accompanying annual salary was a hefty $255,000 that also included $75,000 in relocation costs, six months of severance compensation, and $25,000 in deferred compensation. His salary while a State employee was $150,000. How about the Fire Chief who served Orinda and Moraga whose annual salary was $186,000 and ‘legally’ spiked his pension with unused vacation and holiday leave to walk out with an annual pension of $241,000. To compound the matter this Chief was then re-hired as a consultant where he received $176,000 with no reduction in his pension payments. Situations similar to these occur regularly because significant numbers of government agencies have sought salary formulations that automatically create a ratchet effect on public employee compensation because the salary schedules are interconnected. Compare the figures described above to the $36,000 a year pension received by 78% of all CalPERS retirees.

Third, much of the outcry that public employee pensions are unsustainable is recent and appears all too convenient. How many folks know that the State and many CalPERS contracting agencies were not required to make pension contributions during the boom years? The impact to CalPERS due to the recent economic distress is undeniable; however, it seems very ironic that little attention has been given to the recovery of the CalPERS balance sheet. It is also important to understand that current conditions will not persist. Pension plans rise and fall with the markets and trying to apply today’s conditions to the future is foolish and defies common sense. History has proven that markets will consistently provide steady returns between 8 and 10 percent over periods that exceed 10 years. Why does it seem everyone is in a rush to ‘reform’ public employee pensions before the economy has even recovered?

Lastly, I do agree public employee pension reform is important and necessary. However, we all know that ‘reform for the sake of reform’ will wind up being symbolic at best and will most likely only impact the ‘average’ employee. I also believe the recent increase in employee contributions is a good start. However, as economic conditions improve and the sting of furloughs subside that public employees must consider additional increases if the economy continues to languish and the CalPERS portfolio does not recover entirely. Real and lasting reform can only be achieved by curbing the excesses seen in many local districts, by capping the amount of pension payout to that of Social Security ($106,000 w/ annual COLA), and by reevaluating the overly generous compensation received by local elected officials, political appointees, public safety employees, and special district employees.