LA, CA still avoiding pension reality

The ultimate pension reform is Detroit-style bankruptcy, with retirees getting less than what they are owed by contract. As the NY Times reported on July 22:

“DETROIT — Coming to terms with what came to be seen as inevitable, this city’s public-sector retirees have voted to lower their expected pension benefits, a crucial step in the city’s plan to emerge from bankruptcy before the end of the year.

“The result, announced late Monday night, came after two months of court-required voting.

“The balloting revealed a belief by current workers and retirees that the city’s offer — as much as 4.5 percent cuts to some pensions and diminished future cost-of-living increases — would be even worse if this one was rejected.”

Note: That’s for those already retired.

But here’s what’s still going on in California, according to CalPensions.com

“A labor board may have helped open a new front in public pension battles last week by overturning a Los Angeles cost-cutting reform, ruling that pension cuts for new hires must be bargained.

“New hires have been a target for lower pensions because, unlike workers already on the job, they are not believed to have a ‘vested right’ to their current pension, protected by contract law, that can only be cut if offset by a comparable new benefit.

“The five-member Los Angeles Employee Relations Board unanimously adopted a hearing officer’s conclusion that the city violated labor law by imposing a pension cut on non-sworn new hires without bargaining with public employee unions.”

The ruling will be repealed. But it’s clear that California public-sector unions and their members don’t understand yet that there just isn’t enough money for the lavish retirements they have been promised.