CA Supreme Court to review pension case with nationwide implications

 

calpers-buildingReigniting a perpetually smoldering debate with nationwide implications, the California State Supreme Court agreed to consider whether rules cracking down on pension boosting strategies could be applied to unionized government workers. 

“A state appeals court in San Francisco ruled in a Marin County case in August that the new laws could be applied to current employees — a potentially major setback for the workers and their unions, and a victory for local governments facing mounting deficits in their pension plans,” the San Francisco Chronicle reported. “But the state’s high court voted unanimously Tuesday to put that ruling on hold while it reviews the issue for a future statewide resolution.”

“The new laws were intended to curb pension ‘spiking,’ the practice of boosting retirement benefits by increasing an employee’s pay during the final years of employment,” the paper added. “It is often done by cashing out unused vacation time, sick leave, compensation for use of one’s car and other nonmonetary benefits.” Some 2 million California public employees have retirement plans underfunded by many billions of dollars, according to the Chronicle.

Seeking momentum

As has become almost customary, labor activists and policymakers around the country have positioned themselves to act swiftly on whatever the court should decide, possibly using a ruling to press for a decisive outcome in the pension wars that have see-sawed over the course of the decade. “The ruling would apply only to California, but if the state Supreme Court decides to uphold a lower court ruling that pension benefits can be reduced in some circumstances, it would be an important signal to the many other states grappling with unsustainable pension burdens and similar rules forbidding benefit cuts,” Eric Boehm noted at Reason. “It would also signal that courts are willing to reconsider the balance between public workers and the states (and the taxpayers in those states) writing their checks.”

“According to data from Transparent California, a project of the Nevada Policy Research Group, more than 20,000 retired public workers in California pulled down more than $100,000 in retirement benefits during 2015. Meanwhile, the CalPERS pension fund is more than $139 billion in the red, an amount that would require every man, woman, and child in California to pay $11,000 if it were divided evenly.”

With over $300 billion in assets, as Andrew Andrzejewski wrote at Forbes, CalPERS has become a symbolic anchor to pension defenders and an albatross from the viewpoint of critics, “helping 1,251 local governments confer ‘highly compensated’ pensions to tens of thousands of public employees. Updated numbers displayed at OpenTheBooks.com show there is a $2.8 billion annual cost to pay out 21,862 six-figure public-sector retirees via CalPERS.”

Cautionary tales

At the same time as pension watchers have braced for the state Supreme Court’s ruling, pension hawks have urged Californians to consider cautionary tales from outside the state. “While justices will consider the case based on its legal merits, state taxpayers should hope they keep in mind what has happened in Illinois since its Supreme Court held that public employee pensions were immutable in May 2015,” the U-T San Diego Editorial Board suggested. “A state that already was in terrible shape financially now looks on the brink of disaster, unable to pay $8 billion in bills. In September, former FDIC chair William M. Isaac called for the state to declare bankruptcy.”

Even with the sense of urgency surrounding the case, observers warned that the court could take its time. “Despite the California Supreme Court’s decision to accept the Marin County pension fund case, the case may move slowly. The Supreme Court in its posting said it was waiting for another case to be resolved,” according to Pensions & Investments. “Legal observers say the state Supreme Court wants to consolidate all the outstanding cases before holding a hearing and making a final decision.”

12 comments

Write a comment
  1. michael
    michael 1 December, 2016, 08:30

    I anticipate that Judges, as state employees, probably game the system in the same way as the rest of the public employees. Therefore in keeping with the public employee narrative “spiking” will be ruled acceptable.

    Nothing short of bankruptcy is going to derail the liberal narrative. Liberals whether Democrat or Republican do not learn lessons until they are forced.

    Reply this comment
  2. Ulysses Uhaul
    Ulysses Uhaul 1 December, 2016, 10:53

    This is nonsense……pensions are solvent…..no dumpster diving for cops and fire retirees.

    Now let’s see the Troll Runway ramp up with the usual uncaring doomers in their Poly pants and Kmart tennies.

    Reply this comment
    • MAGA
      MAGA 1 December, 2016, 13:58

      Why not just stick your Cheetos stained fingers in your ears, stomp your feet and say LA LA LA LA I can’t hear you. Facts are stubborn things and can’t be dismissed just because they don’t fit into your intellectually stunted, Leftard worldview.

      Besides, I hear Cheetos are the crown jewel of dumpster diving. Yum Yum!

      Reply this comment
      • Ulysses Uhaul
        Ulysses Uhaul 1 December, 2016, 23:26

        Geesh…

        Just the messenger!

        Reply this comment
        • michael
          michael 2 December, 2016, 13:39

          2017 will yield a ban on “precious” Sanctuary city funding. California will face the choice of “you can keep your illegals as long as you pay for them.” Liberals only like to pay for their programs with other peoples money.

          You about as credible messenger as CNN. By the way, did you actually believe Hillary Clinton would win?

          Reply this comment
          • Queeg
            Queeg 2 December, 2016, 16:59

            Republicans will eat their own. Already your weird blood thirsty neocon Grahmn dancing the Rino jig….

            The Donald gotta start slapping-

  3. Bill Gore
    Bill Gore 2 December, 2016, 20:28

    “This is nonsense……pensions are solvent…..no dumpster diving for cops and fire retirees.”
    OH YEAH? Check this out, A-HAUL:
    http://www.zerohedge.com/news/2016-12-02/stanford-study-reveals-california-pensions-underfunded-1-trillion-or-93k-household

    I think it’s time for moronic pony tail progtards to gracefully shuffle off and eat some brown acid…..

    Reply this comment
    • Queeg
      Queeg 4 December, 2016, 12:38

      Comrade Billy

      You don’t even live in California…..you’re opinion is frankly a nonevent-

      Reply this comment
      • Bill Gore
        Bill Gore 6 December, 2016, 06:52

        The Stanford Study is ‘my opinion’?
        Pull your ponytail out of your nether regions little buddy.

        Reply this comment
  4. Ted. Mentor to the doomed....
    Ted. Mentor to the doomed.... 7 December, 2016, 17:28

    Zzzzzzzzz same ol s— from the goofy pension envy crew—-zzzzzzzzzzzzz nite nite girls

    Reply this comment

Write a Comment

Leave a Reply



Related Articles

Elizabeth Emken: ‘It’s time to un-ring the Obamacare bell’

Note: This is the second in a series of profiles of the four major candidates for the crucial 7th Congressional

Will new sexual harassment rules turn corner on abuse scandal?

SACRAMENTO – Will a newly announced set of Senate rules for handling sexual harassment claims help change a Capitol culture

Congressional conservatives clash with CA GOP

In a broad turnabout, the fortunes of California Republicans in Congress have waned as conservatives on the Hill have gained the