Feeble CalPERS reform shows Brown who runs Sacramento

Feeble CalPERS reform shows Brown who runs Sacramento

Brown JerryTaken at face value, the pension reforms touted by Gov. Jerry Brown in 2011 and 2012 were genuinely far-reaching for a California Democrat, even one as allegedly independent as Brown. But from the 2014 perspective, two of the key provisions previously sought by the gov have not only gone nowhere; they’ve been rejected in a way that makes him look like a powerless bystander.

Ed Mendel of calpensions.com explained how one key reform was gutted.

 A bill that started out as Gov. Brown’s proposal to restructure the CalPERS board emerged from the Legislature last week as a more modest change: a requirement that CalPERS board members receive 24 hours of education in pension fund operations.

A 12-point pension reform proposed by Brown in October 2011 called for more “independence and expertise” on the CalPERS board. The governor’s appointees would have doubled to six, matching the number of labor representatives.

“In the past, the lack of independence and financial sophistication on public retirement boards has contributed to unaffordable pension benefit increases,” said No. 11 of the governor’s 12-point plan.

Pension-spiking was target of move

Brown’s goal was plain: to bring more honesty to board decisions about pensions.

The “unaffordable” pension increases were not identified. But the reference may have been to two bills backed by the powerful CalPERS board, which sets annual rates that must be paid by government employers in the giant retirement system.

When a booming stock market gave pension funds a surplus, a CalPERS sponsored bill, SB 400 in 1999, sharply boosted Highway Patrol pensions and authorized the same pension formula for local police, which many obtained through bargaining.

For state workers, SB 400 rolled back a pension cut given new hires earlier in the decade. Low pensions earned under the old plan could be boosted through a “buy back” with increased contributions. Retirees received a 1 to 6 percent pension increase.

A second bill, AB 616 in 2001, authorized three escalating pension formulas for local governments in CalPERS and 20 county systems operating under a 1937 act. The top formula, “3 at 60,” provides 120 percent of pay after 40 years of service at age 60. (See table at bottom)

The CalPERS board, rejecting the advice of its chief actuary, encouraged local governments to boost pensions authorized under AB 616 by offering in 2001 to inflate the value of their pension fund investments to help cover the increased cost.

Revising a bill from changing the board’s makeup to requiring education is pretty drastic.

CalSTRS exempted from key pension reform

But it’s still not as much of a symbol of failure as Brown’s other retreat. His 2011 pension manifesto’s key provision was that the state move toward a retirement-benefit funding structure in which public employees and taxpayers roughly shared costs.

The theory was that if employees had to share equally in the huge cost of their pensions, they’d be more amenable to plans to reduce them going forward so as to increase their take-home pay.

But when it came to enforcing this provision — and triggering a fight with the CTA and the CFT — Brown sized up the Sacramento landscape and doesn’t appear to have even tried. The provision in his 2014-15 budget shoring up funding for the California State Teachers’ Retirement System requires that taxpayers foot 90 percent of the bill and teachers just 10 percent.

It’s an “Animal Farm” thing, you see. Some public employees are more equal than others.

Brown’s failure on these fronts is one more reminder that even a popular governor can’t shake up a system in which unions wield such entrenched power. A ballot initiative is the only way to force the sort of changes the governor sought — and that would face monkey-wrenching from the Attorney General’s Office.

This sad state of affairs doesn’t feel like union power-flexing. It feels more like union occupation.

75 comments

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  1. cyrano
    cyrano 8 July, 2014, 18:22

    The Ancien regime, California style. Heads rolled after the first one.

    Reply this comment
  2. californianative
    californianative 9 July, 2014, 06:06

    Damn, I was dumb. Instead of getting all that high-falutin’ edumacation , I should have joined the CHP. They probably would have let me ride a motorcycle like Erik Estrada. “Get your money for nothing and your chicks for free”…

    Reply this comment
    • Franchot Tone Sr.
      Franchot Tone Sr. 9 July, 2014, 07:23

      Ha ha: “your chicks for free” indeed. OR just threaten them with a citation unless they ‘help you out’ with some ‘relief’….

      Reply this comment
    • S Moderation Douglas
      S Moderation Douglas 9 July, 2014, 16:29

      You don’t even need CHP.

      Pension math is easy. Any fifth grader can do it. Start with an assumption:

      ” Let’s take a miscellaneous employee, a common classification that covers everyone from DMV office staff to local school custodians. Say the employee retires at age 55 after 20 years of service with a final salary of $92,200.”

      (Jon Ortiz, Sacramento Bee, April 9, 2014)

      Because all DMV office staff and school custodians make $92,000 a year. And they routinely retire at 55.

      This is how the rumors get started.

      Reply this comment
      • StevefromSacto
        StevefromSacto 9 July, 2014, 17:17

        The average CalPERS pension benefit is less than $25,000 a year. Real gold-plated stuff. But that doesn’t matter to the Right. In their view any amount of money paid to a government employee in salary or pension or benefits is too much. The idea, as they’ve said repeatedly, is to “shrink the size of government so they can drown it in the bathtub.”

        And of course the idea that any workers should have a say in their salaries, pensions and working conditions is nothing more than a Commie plot.

        Reply this comment
        • Donkey
          Donkey 11 July, 2014, 11:59

          You are arguing a scenario made up by RAGWUS feeders StevefromSacto, the argument is about the taxpayers dollars not being used for the taxpayers benefit, over 90% goes to the RAGWUS the taxpayers only see less than 10% in any real return. 🙂

          Reply this comment
  3. Ted Steele, Editor
    Ted Steele, Editor 9 July, 2014, 06:22

    Cal Pers== 290 Billion baby!!

    Reply this comment
      • Donkey
        Donkey 9 July, 2014, 10:20

        John, TCS doesn’t do math, it was not required when he hired on to his RAGWUS feeding job. 🙂

        Reply this comment
        • Ted
          Ted 16 July, 2014, 16:28

          just like his RAGWAS Fed LE son I guess.

          Reply this comment
          • Donkey
            Donkey 17 July, 2014, 18:55

            Why do you hate the Feds TCS? What a hater you are!!! 🙂

    • NTHEOC
      NTHEOC 9 July, 2014, 11:13

      Every citizen in California who holds a mortgage and cannot pay for it in full today is underfunded! Oh my, the mortgages in California have an unfounded liability of, hmmmm, let me see, infinity!!!!!!!!! Blah, blah with your Unfunded liability BS!!!

      Reply this comment
      • AJ
        AJ 9 July, 2014, 13:42

        And here is the problem, in a nutshell. People can’t do math, or have any understanding of how finance works. And they’re not going to learn it in 24 hours.

        A mortgage (the obligation) is secured by real property (the asset). If the real property is worth more than the debt (which is the case for the vast majority of Californians), the mortgage is not “underfunded”. If the borrower stops paying, the debt and be paid by liquidating the asset. And, if the property is worth less than the debt, the underfunded portion is easily calculated as the difference between the asset value and the debt secured by the asset. Which could never possibly be infinity.

        The defined pension obligation (the obligation) is secured by the the pension fund (the assets). If the obligation exceeds the assets (which is the case), then the pension is underfunded.

        The only way to solve the underfunding is to either:

        a) increase the value of the pension fund, either because the market goes up (hooray!), or more money gets pumped into the fund–90% from taxpayers, 10% from the employees; or
        b) decrease the defined obligation (never going to happen)

        Do you understand now?

        Reply this comment
        • S Moderation Douglas
          S Moderation Douglas 9 July, 2014, 17:12

          Kinda like a mortgage.

          In 2000, CalPERS was about 130% funded.

          And I had over $200k equity in my house.

          Today CalPERS is maybe 70% funded, and I am $40k underwater.

          For all practical purposes, not much has changed. We make marginal changes to adapt to changing markets and revenues. CalPERS is collecting more from employers and employees. Pension reforms are occurring. I refinanced for a lower interest rate and lower monthly payments. And extended my mortgage out another five years.

          I fully expect to pay my mortgage down to where I have equity again, if I live long enough, and I expect CalPERS will live longer than I will.

          Point is, neither of us has to come up with the cash tomorrow, and in the meantime, we have a nice roof over our head, a pool to cool off in, and beans in the pot (literally).

          And CalPERS is still fulfilling its fiduciary duty. There are half a million retirees today still receiving the deferred compensation as per their contracts. And they are paying down the unfunded liability. Not “steadily”. There will be ups and downs. We were in much better shape in 2000, and WORSE shape in the eighties.

          Reply this comment
          • Donkey
            Donkey 10 July, 2014, 07:08

            You RAGWUS feeders are a shameless lot and your math skills are imaginary. The pension scam is not a mortgage. When you are paying off a home you know your costs and can plan for them. You feeders have only planned for the taxpayer to pay the costs of ever growing pensions. When you have a million people receiving $80,000 to $200,000 you are going to find that fund exhausted in a few years. What you erudite fools fail to see is the exponential growth of baby boomers cashing out, along with their medical.

            The simple truth is you are all greedy mindless crooks, hell bent on keeping what you have stolen. If honest people were running government the RAWUS would be eradicated, but your crooks are driving this train for now. 🙂

          • S Moderation Douglas
            S Moderation Douglas 10 July, 2014, 11:35

            LOL!!!!

            blah blah rant!!!

            You should put “RAWUS” in your spell checker. If you can’t get it right, how will Google ever find you???

            CalPERS will be here long after you and I are gone.

            Forget the mortgage. Here’s a fifth grade math problem for you “erudite fools”.

            If you add two cups of water to a bucket every day, and take out one cup, how long will it take to empty the bucket?

            CalPERS is paying out $18b a year and STILL GROWING.

          • Donkey
            Donkey 10 July, 2014, 12:52

            But SFB S&MD you are growing with inflated dollars because the FED is buying debt at the tune of $85 billion a month.
            Your analogy id BS too, because soon you will be drawing five cups a day while putting only one in you erudite RAGWUS feeding fool. 🙂

    • Ted Steele, Editor
      Ted Steele, Editor 9 July, 2014, 21:57

      LOL Johnny!

      It’s “underfunded” in your twisted convoluted half baked narrative —- but carry on! I am enjoying watching the Calpers fund rise each year!

      editor

      Reply this comment
    • SeeSaw
      SeeSaw 11 July, 2014, 00:46

      As of 7/9/14 it is 300.6 Billion.

      Reply this comment
  4. S Moderation Douglas
    S Moderation Douglas 9 July, 2014, 10:45

    His 2011 pension manifesto’s key provision was that the state move toward a retirement-benefit funding structure in which public employees and taxpayers roughly shared costs.”

    “The provision in his 2014-15 budget shoring up funding for the California State Teachers’ Retirement System requires that taxpayers foot 90 percent of the bill and teachers just 10 percent.”

    The original provision was for employees to pay half the *normal* cost. This year’s increase is for paying down the unfunded liability.

    Brown is definitely a political pansy. The Little Hoover Commission proposed twelve reforms to the pension system and Brown only got ten. He didn’t change the board, and didn’t reduce future accruals for current workers. (Which would have been in litigation for generations.)

    What kind of lily livered, weak kneed sissy governor can’t EVERYTHING he asks for, WHEN he asks for it???

    Reply this comment
    • Chris Reed
      Chris Reed Author 9 July, 2014, 12:57

      “My plan will require that all new and current employees transition to a contribution level of at least 50 percent of the annual cost of their pension benefits.” — Jerry Brown, 2011

      Sorry, SMD, using the “normal” semantic gambit on pension costs doesn’t work. The beefed-up funding formula for CalSTRS reduces the share that teachers pay for “the annual cost of their pension benefits.”

      Reply this comment
      • S Moderation Douglas
        S Moderation Douglas 9 July, 2014, 14:21

        “9 The Legislature must require employees and employers to
        annually adjust pension contributions based on an equal sharing
        of the normal costs of the plan.

        http://blogs.sacbee.com/the_state_worker/110225%20LHC%20report.pdf
        ………………………………….
        1. Equal Sharing of Pension Costs: All Employees and Employers
        While many public employees make some contribution to their retirement – state employees contribute at least 8 percent of their salaries – some make none. Their employers pay the full amount of the annual cost of their pension benefits. The funding of annual normal pension costs should be shared equally by employees and employers.

        http://gov.ca.gov/docs/Twelve_Point_Pension_Reform_10.27.11.pdf
        ……………………………………….
        “Normal Cost (NC) – The portion of the PVFB that is attributed to the current year of service.”

        as opposed to:

        “Actuarial Liability (AL) – The portion of the PVFB that is attributed to past service.”

        http://www.actuary.org/pdf/pension/fundamentals_0704.pdf
        ……………………………………….
        “Normal cost” isn’t a semantic gambit. It’s an accepted actuarial definition, and it was made VERY clear at the time.

        Sorry, Chris, it is what it is.

        Reply this comment
        • Donkey
          Donkey 10 July, 2014, 12:54

          Sure S&MD, then why are so many cities headed for BK? You RAGWUS feeders are clueless. 🙂

          Reply this comment
          • S Moderation Douglas
            S Moderation Douglas 10 July, 2014, 13:51

            non sequitur

          • Donkey
            Donkey 10 July, 2014, 15:28

            It’s all taxpayers money my RAGWUS feeding friend. 🙂

  5. NTHEOC
    NTHEOC 9 July, 2014, 11:18

    Calnative says,
    I was dumb. Instead of getting all that high-falutin’ edumacation , I should have joined the CHP
    ———-
    Don’t worry Calnative, your not the first person I’ve heard that has regrets due to their life decisions. So here’s a song for you bitterman. Dream on,Dream on, Dream until your Dreams come true!!!!!!!!!!!!!!

    Reply this comment
  6. S Moderation Douglas
    S Moderation Douglas 9 July, 2014, 12:00

    I shoulda been a prison guard.

    I searched for “physical requirements”

    One requirement:

    “able to run half mile”

    I can do that.

    “in under five minutes”

    I can do that.

    “Carrying a forty five pound weight in each hand.”

    Who wants to be a prison guard, anyway.
    ……….

    “I should have joined the CHP.”??

    Reply this comment
  7. Ted Steele, Editor
    Ted Steele, Editor 9 July, 2014, 22:01

    I love it! ALL of these jobs are still hiring and of course no doomers out here want the jobs!

    They are too sensitive with their high minded lunacy!

    apologies to B. Pasternak

    lmao!

    Reply this comment
  8. Ulysses Uhaul
    Ulysses Uhaul 9 July, 2014, 22:52

    If leverage is good in real estate why not a prudent amount of leverage in pension programs?

    This is a beat, boring and inane subject…..taxes will fund any shortfall…..finis-

    Reply this comment
    • Donkey
      Donkey 10 July, 2014, 07:12

      Ahaul, you are a drunk sitting in the engineers set of a train that will soon be off its tracks, you just are not bright enough to know it, yet!! 🙂

      Reply this comment
      • S Moderation Douglas
        S Moderation Douglas 10 July, 2014, 14:18

        You forgot to say “RAWUS”

        Reply this comment
        • Donkey
          Donkey 10 July, 2014, 15:56

          It’s RAGWUS my left leaning thief!! 🙂

          Reply this comment
          • S Moderation Douglas
            S Moderation Douglas 10 July, 2014, 16:48

            Step 1: copy
            Step 2: paste

            ” If honest people were running government the RAWUS would be eradicated, but your crooks are driving this train for now.”

            Step 3: “RAWUS” it is!!!

          • Donkey
            Donkey 10 July, 2014, 21:23

            Very anal aren’t you S&MD. A RAGWUS feeder is your domain. The entire RAGWUS is a scam codified into law by dishonest feeders. 🙂

          • Ted
            Ted 16 July, 2014, 16:28

            Like your son Duncey??

          • Donkey
            Donkey 17 July, 2014, 18:56

            Why all the hating on the FBI TCS? 🙂

  9. Ted Steele, Editor
    Ted Steele, Editor 10 July, 2014, 21:14

    Is it RAWUS or RAGWAS?

    What does it stand for?

    Poor Duncey

    Reply this comment
  10. Donkey
    Donkey 10 July, 2014, 21:23

    You, my RAGWUS feeding fool!! 🙂

    Reply this comment
    • Ted Steele, Editor
      Ted Steele, Editor 11 July, 2014, 06:37

      No, I mean you always say RAWUS or RAWES…what do the letter stand for? Is it Raw– something?

      Reply this comment
      • Donkey
        Donkey 11 July, 2014, 09:01

        It’s you TCS, all you my tax stealing friend. 🙂

        Reply this comment
        • Ted Steele, Editor
          Ted Steele, Editor 11 July, 2014, 22:37

          LOL– I think you mean tax “paying” friend little buddy! I have to work and pay taxes to support your LE son!

          Oh the irony! ™

          Reply this comment
          • Ted Steele, Editor
            Ted Steele, Editor 11 July, 2014, 22:38

            Hey Duncey–

            Remember when they arrested that FBI agent for being a Russian spy?

            LMAO you must be very conflicted

          • Donkey
            Donkey 17 July, 2014, 18:59

            Why mock the FBI TCS, there are criminals in every walk of life, but mostly local LE sociopaths. Are you looking to hurt people associated with the FBI, you seem very fixated! 🙂

  11. Queeg
    Queeg 10 July, 2014, 21:52

    Without educated, trained government workers there would not be any civilization in California.

    Reply this comment
    • Donkey
      Donkey 11 July, 2014, 09:03

      Queegy, there would not be a problem with the budget if we didn’t so many worthless “trained government workers” that is a given. 🙂

      Reply this comment
      • Ted Steele, Editor
        Ted Steele, Editor 11 July, 2014, 22:10

        Is your son a “worthless gov worker”? Or is he special?

        lmao!!

        Reply this comment
        • Donkey
          Donkey 12 July, 2014, 21:10

          He’s special! He works for the feds, they don’t frag two year olds or shoot teenage girls. 🙂

          Reply this comment
          • The Africanized Swarm of Ted Steele System
            The Africanized Swarm of Ted Steele System 13 July, 2014, 09:27

            LMAO!! He’s “special” because he “works for the feds”????????

            Duncey– you are posting enough hypocritical material to keep us busy for a year!

          • Donkey
            Donkey 15 July, 2014, 19:13

            TCS, every RAGWUS member is a hypocrite, with you being one of the top hippos. 🙂

          • Ted
            Ted 16 July, 2014, 16:27

            So Duncey— Your son is in the RAGWES too?

            Or is he “special”?

            LMAO

  12. Ted Steele, Editor
    Ted Steele, Editor 11 July, 2014, 06:38

    True enough Queeg– I wouldnt want to live here without Gov workers to care for us…protect us etc. Good point!

    Reply this comment
  13. Queeg
    Queeg 11 July, 2014, 07:57

    The problem is doomers supporting slaver globalists taking advantage of the working class.

    Reply this comment
    • Donkey
      Donkey 11 July, 2014, 09:11

      The private sector is supporting fat, lazy RAGWUS bureaucracies at every level of government, the bureaucracies are the slavers Queegy. It is the bureaucracies unions that are doing the en-slaving, hence the most prolific numbers of citizens in the world would not be found in the good old “freedom” sharing USA if the RAGWUS wasn’t running the show. 🙂

      Reply this comment
      • Ntheoc
        Ntheoc 11 July, 2014, 18:19

        Now donkey, is that anyway to talk about your own fat trough eating SON!

        Reply this comment
        • Donkey
          Donkey 11 July, 2014, 19:51

          I have lots of Sons Ntheoc, all better than you in every way. I have a son that is in the FBI, but he works for his pay, unlike you. 🙂

          Reply this comment
          • Ted Steele, Editor
            Ted Steele, Editor 11 July, 2014, 22:07

            LOL
            So Duncey– your son is a troughie.

            Does any of the critical hate filled ignorant nonsense about ALL gov workers you have slobbered out here apply to him? Or are “some” gov workers good?

            waiting for a direct answer….lmao

          • Ntheoc
            Ntheoc 11 July, 2014, 22:21

            Sorry to expose you like that donkey, but it was time!

          • Ntheoc
            Ntheoc 11 July, 2014, 22:24

            Ted, maybe it’s a sore spot for old donk. His son probably hasn’t returned his call since he accused him of fragging a 2 y/o and gunning down women.

          • Donkey
            Donkey 12 July, 2014, 21:24

            Doesn’t bother me at all you Ntheoc, my Sons have more integrity than any RAGWUS feeder in California. 🙂

          • Donkey
            Donkey 13 July, 2014, 05:30

            Netheoc, the fragging took place in Atlanta and the teenage girl, Ashley MacDonald was murdered in HB, by HB officers Parker and Randle, GED fits you well. 🙂

          • Ted
            Ted 16 July, 2014, 16:26

            Duncey— Has your son’s agency committed any misconduct? Hmmm
            Oh yes they have.

            Once again— you are a hypocrite calling others out when your son is hip deep in it too.

          • Donkey
            Donkey 17 July, 2014, 19:01

            It seems you are trying to expose a federal agent TCS, you had better think again. 🙂

  14. Ted Steele, Editor
    Ted Steele, Editor 11 July, 2014, 21:58

    LOL FBI
    Famous But Ineffective

    Duncey’s boy is a troughie!! LMAO sooooo typical! ALL of his ranting RURGS are ALL about unworked emotional family issues of disappointment!!!

    OMG LMAO I have to catch my breath!!!!

    OMG THIS explains EVERY hate filled ignorance laced poorly composed hillbilly RURG the clod has EVER vomited up out here!!!!!!! Thanks Ntheoc!!!!!

    Reply this comment
    • Donkey
      Donkey 12 July, 2014, 21:25

      You are a coward TCS. 🙂

      Reply this comment
      • The Africanized Swarm of Ted Steele System
        The Africanized Swarm of Ted Steele System 13 July, 2014, 09:28

        Isn’t the “coward” the person who spews HATE on every gov worker except his fed employed son?

        Hmmmmmmm
        LOL

        Reply this comment
        • Donkey
          Donkey 15 July, 2014, 19:15

          A coward is you TCS, straight up panzy my little parrot. 🙂

          Reply this comment
          • Ted
            Ted 16 July, 2014, 16:24

            LOL Yikes! Looks like we hit a nerve— so…..who is the coward here little buddy? 1. I post with my true name, ah…you’re Duncey, right? 2. You have spent years out here spewing pure hate speech towards many dedicated public servants, particularly the cops. 2. You have spent years out here spewing hate towards the family members of gov workers. 3. And ALL of this occurring while YOU had a son in LE. A RAGWES son, a trough feeder.

            Hmmmm seems to me like you’re assignment is this:

            A–go look up the word hypocrite and…
            B– go look into a mirror, you’ll see a TRUE coward.

          • Donkey
            Donkey 17 July, 2014, 19:03

            You are an anti-FBI nut TCS and you should be vetted inside and out, you are unhinged. 🙂

  15. Ntheoc
    Ntheoc 11 July, 2014, 22:05

    My pleasure, lol!!!!

    Reply this comment
  16. Ted Steele, Editor
    Ted Steele, Editor 11 July, 2014, 22:45

    RAGWES

    Rurgs
    Against
    GOV
    Workers
    Except his
    Son

    LMAO!

    Reply this comment
    • Donkey
      Donkey 12 July, 2014, 21:26

      California Union Workers my RAGWUS feeding liar. 🙂

      Reply this comment
      • The Africanized Swarm of Ted Steele System
        The Africanized Swarm of Ted Steele System 13 July, 2014, 09:29

        LOL RAGWES

        Except my son!!!

        LMAO what a fool!

        Reply this comment
        • Donkey
          Donkey 15 July, 2014, 19:17

          You’re not man enough to have a Son you weak little boy, from your posts it is clear you will never be one either my RAGWUS cowardly parrot. 🙂

          Reply this comment
          • Ted
            Ted 16 July, 2014, 16:22

            LOL Yikes! Looks like we hit a nerve— so…..who is the coward here little buddy?

            1. I post with my true name, ah…you’re Duncey, right?

            2. You have spent years out here spewing pure hate speech towards many dedicated public servants, particularly the cops.

            2. You have spent years out here spewing hate towards the family members of gov workers.

            3. And ALL of this occurring while YOU had a son in LE. A RAGWES son, a trough feeder.

            Hmmmm

            seems to me like you’re assignment is this:

            A–go look up the word hypocrite and…

            B– go look into a mirror, you’ll see a TRUE coward.

            lmao

          • Donkey
            Donkey 17 July, 2014, 19:06

            As I said above you are unhinged and anti-FBI. You need to be vetted before you decide to go see a movie. 🙂

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