Public pension struggles roil CA

Public pension struggles roil CA

Pension reform shredded, Cagle, Wolverton, Aug. 25, 2014The public pensions crisis has not subsided in California — nor has the conflict that surrounds it. A waves of political, legal and policy developments have kept the issue at the center of the state’s attention. In addition to a key election and a closely-watched lawsuit, a new initiative out of Sacramento has focused the pension debate on three general areas: municipal law, state law and public opinion.

Of the several California cities where pension reform emerged as the sharpest political issue, San Jose faced some of the most pointed combat. Pension reform drove this month’s close election for mayor, which pitted Supervisor Dave Cortese — the union-backed candidate — against Councilman Sam Liccardo, who was allied to outgoing Mayor Chuck Reed.

The lines were the city’s pension reforms in Measure B, approved by over two-thirds of San Jose voters in 2012. As The Wall Street Journal observed, however, Liccardo’s Democratic pedigree was 德州扑克在线游戏 enough to help turn back Cortese’s challenges to the Reed legacy.

According to the Journal, “San Jose’s pension reforms are among the boldest in the country because they modify benefits for current workers in addition to future hires.” In the world of pension policy, that approach has sparked a virtual panic among defenders of the status quo. Wherever such changes have been proposed, critics have warned that public-sector employees would essentially abandon their jobs; in San Jose, reported the Journal, “the city’s police union faulted the pension reforms for a putative ‘exodus’ of officers and a crime wave,” even though “property and violent crime rates have fallen since 2012.”

Liccardo recently put an optimistic face on his goal of fully funding annual health care obligations for retirees. He saw “plenty of common ground,” he told KQED. “We have new opportunities going forward, and I’ll be talking with the heads of our police union and certainly with the rank and file about how we can find common ground.” But Reed cautioned  he expects more union-driven legal challenges ahead.

A tug of war in Stockton

Although smaller in size than San Jose, Stockton’s battles over pensions have also been closely watched, on account of the city’s struggle through bankruptcy proceedings. A recent pair of rulings by bankruptcy judge Christopher Klein heightened the drama surrounding Stockton’s attempts to meet its pension obligations with a minimum of fuss.

First, Klein held that it would be unconstitutional should pension funds go completely untouched against a city’s will. But then he ruled  Stockton’s planned agreement on the bankruptcy was properly structured, despite leaving pensions largely intact.

The careful decision left reform opponents with half a loaf: on the one hand, cities had the right to touch pensions, violating the unofficial so-called “California Rule” that traditionally kept them sacrosanct; but on the other, the California Public Employee Retirement System, which filed legal objections to any pension changes, was basically free and clear.

Stockton’s private creditors, by contrast, took a big haircut — a setback all of them accepted, with one exception. Upsetting Stockton’s delicate balance of interests, Franklin Templeton Investments has filed an appeal of Klein’s second ruling. With a total of $36 million in loans sunken into Stockton — which has paid CalPERS $29 million a year and counting — Franklin was set to receive just 12 cents per dollar on its investments, according to the city’s bankruptcy plan, according to the Sacramento Bee.

Echoing the dire predictions made in San Jose, the Bee reported, Stockton city officials and CalPERS warned that cutting pensions would touch off a “mass exodus by police officers and other city workers.” Franklin, however, argued  there simply wasn’t adequate proof that pension revisions would collapse key public services — and that basic fairness required its share of the bankruptcy burden be lessened. Now, that argument will go to the 9th Circuit Bankruptcy Appellate Panel in Pasadena.

New transparency

Meanwhile, overarching the city-by-city conflict, a potentially game-changing development has emerged from Sacramento, where incoming Treasurer John Chiang announced a new website designed to supply citizens with the gory details of California’s accumulated pension obligations.

Available at ByTheNumbers.sco.ca.gov, the data has given Californians sudden access to about a million items of pension information, from fiscal years 2002-03 to 2012-13, according to the Los Angeles Times.

Announcing the site, the Times reported, Chiang expressed his hope the research would “empower greater citizen participation in how government handles a policy matter which is central to California’s long-term prosperity.”

12 comments

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  1. Ulysses Uhaul
    Ulysses Uhaul 18 November, 2014, 09:09

    Like Peuton Manning Hurry Hurry Hurry befor Constipado dims the joy CWD articles give readers AND before Troll Boy cheap shots fair and balanced posters!

    Reply this comment
  2. Ronald Stein
    Ronald Stein 18 November, 2014, 10:48

    The inmates are running the Asylum. The major problem is that most current public employees are guaranteed defined-benefit plans, under which their benefits are guaranteed no matter how well, or badly, the underlying pension investments perform.

    Public sector contracts negotiated by public sector employees that hammer out a contract that forces under duress a third party, taxpayers, to cough up the necessary dough, doesn’t seem too pass the smell test. In fact, it more closely resembles racketeering. Any challenges to that “racket” would be heard before judges who have pension and benefit package they want to protect. Again, seems like a racketeering cover-up right before our public eyes.

    Fiscal irresponsibility protects the jobs of bureaucrats who use their power in ways that harm those who work for a living.

    Reply this comment
  3. LetitCollapse
    LetitCollapse 18 November, 2014, 12:49

    “The public pensions crisis has not subsided in California — nor has the conflict that surrounds it.”

    Of course it hasn’t subsided, Mr. Poulos. Did you really expect it to? heh. They’ve turned the State into a brothel, sir. A house of ill repute! If they put the pension fiasco to a vote of the people and the people were given a choice to either keep the public pension system or to replace it with 401-k equivalents – the 401-k’s would get voted in by a 50% margin!!! hah. Hell, 90% of the private sector have only offered 401-k’s for the last 40 fracken years for Christ sakes!!! No pensions whatsoever. Who do these incompetent lazy government stragglers think they’re worth more than people in the private sector who take all the risks!!! Private sector people don’t have any job security. If they look crosseyed at the boss they’re given one hour to clean out their desks and get the hell out of the business! It’s nuts that the government slobs are treated like royalty. I feel like I’m living in a damn Mel Brook’s movie. Oh, it’s funny to watch the chaos from the outside. But when you’re living on the inside looking out – it’s complete terror and confusion! The entire nation has gone to hell! Even the media doesn’t protect us anymore from tyranny. Top notch investigative reporters used to be a dime a dozen. Today they are as rare as 2 headed porcupines!!! What the hell’s wrong with your industry, Mr. Poulos!!! You sold us out, man!!!

    Reply this comment
    • S Moderation Douglas
      S Moderation Douglas 18 November, 2014, 17:35

      Pensions are earned.

      Calculating the total compensation of equivalent public and private sector workers, either “many” or “most”, depending on which study you read, public sector workers earn less. This includes the cost of pensions and all health benefits.

      It is deferred compensation.

      In fact, average retirement ages for both public and private sector workers is about the same. 61 to 63, and both sectors are gradually increasing. Except for safety workers, of course.

      Hah !!!

      Reply this comment
    • S Moderation Douglas
      S Moderation Douglas 18 November, 2014, 17:38

      “Hell, 90% of the private sector have only offered 401-k’s for the last 40 fracken years for Christ sakes!!!

      Horsecrap !!!

      Hah !!!!

      Reply this comment
  4. Ulysses Uhaul
    Ulysses Uhaul 18 November, 2014, 13:26

    There they go…slamming respectable hard working people from their troll dens.

    Pensions are earned. They are contracted and. Get over it.

    Reply this comment
    • pension ponzi
      pension ponzi 19 November, 2014, 22:32

      Slamming firemen taking another long Starbucks break, who need another peppermint latte when they found out that their kid’s tuition bill at UCLA will go up 25% to pay for UC pensions. A judge in Stockton said pension contracts can be broken in a bankruptcy. Health care and COLA’s aren’t part of the contract, so retirees in Stockton and Detroit lost both of those. UC is better at stealing money than CalPERS.

      Reply this comment
  5. LetitCollapse
    LetitCollapse 18 November, 2014, 13:37

    “Pensions are earned.”

    Horsecrap. They were stolen through corruption and ‘pay to play’. There is no honest explanation why public trough feeders should get big pensions at age 55 when 90% of the private sector workers only get 401-k’s and SS at age 70 or older. Some are never able to retire. They work until they die. It’s a complete unfair, unbalanced and ripoff of the California taxpayers. And, no, you don’t fund them. That’s more horsecrap. The taxpayers fund 80% of your pension payments and in some cases it’s an even high percentage. You wouldn’t know the truth of somebody stuffed it into a paper sack and smacked you on top your head with it. 🙂

    Reply this comment
  6. Dork
    Dork 18 November, 2014, 15:50

    All Public Employee Pensions in California are “Mathematically Impossible to Fulfill” they are by definition a PONZI scheme.
    unless somebody would like to demonstrate using MATH how they can be fulfilled!

    Reply this comment
  7. NTHEOC
    NTHEOC 18 November, 2014, 17:01

    LIC says,
    Hell, 90% of the private sector have only offered 401-k’s for the last 40 fracken years for Christ sakes!!!
    ============================
    And the Ratio of income inequality has continued to skyrocket between private sector workers and the corporate pigs! As the private sector corporations sold the workers lies about the unions and slowly did away with them look what happened! Corporate profits continue to soar as does upper management pay,Ceo pay,etc, all while the American worker gets raped by them. The walmart way of business is the way of corporate America now. It would be nice if we had a Gov’t intervention on all corporations that it was LAW to provide a pension for every worker. We could have some type of TAX on the corporation separate from the norm that the Gov’t could impose and set aside for all workers pensions. In fact let CALPERS handle it. Also put a limit on pay for every CEO pig to a minimum!

    Reply this comment
  8. Queeg
    Queeg 18 November, 2014, 17:25

    Neth

    Whoa. Even out Bro.

    I’ll call Carlos in Bolivia. He will invite you to our annual seminar and fising retreat in Pantagonia. You will gain fresh insights and ways to channel your anger and actions against these stinking globalists and slaver high tech imperialists.

    Reply this comment

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