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

“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The ruling will be repealed.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.

Related Articles

Duh Headline Of The Day

Steven Greenhut: The front page of the LAT Extra section of the Los Angeles Times featured the “dog bites man”

CA 2014 fire season: A test of government competence

The two worst wildfires in recorded state history struck San Diego County in 2003 and 2007, as I wrote about

Pension bigger than salary?

Most people understand that your pension will be less than your salary. You don’t have to commute any more, so