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Public pensions vs. taxed-out Californians [Most commented]

November 29, 2011 |  2:26 pm

Pension-Reform-Plan
The Legislature is gearing up to restructure public pensions for state workers … which means Californians who’re already feeling taxed out are pushing back and questioning why public workers get treated better than those who work in the private sector. (As usual, special contempt is reserved for firefighters .) More about that in a moment.

In Tuesday’s Opinion pages, Dave Low, chairman of the Californians for Retirement Security, issues this sobering fact and a call-to-action in an Op-Ed about protecting workers:

With a new UC Berkeley study showing that half of Californians will retire at or near poverty levels, it is crucial that we work together for retirement security for everyone — in the public and private sector alike.

The problem for our readers, who are unleashing their angst in our discussion board, is what Low writes in the rest of his piece. We don’t need to make budget cuts to the program, he argues,  especially when you consider:

Public employee pension contributions take up just 3% of the state budget. That's less than the 3.8% of state and local budgets contributed to public pensions nationwide, according to the Center on Budget and Policy Priorities.

Here’s what readers are saying.

Bias against state taxpayers

Well, I wouldn't expect a different slant from the chairman of Californians for Retirement Security, but this does seem very biased against the California taxpayer.

Mr. Low concedes some excesses in the system and these should be addressed immediately:

  • The public has a right to be indignant about six-figure public pensions.  A cap on public pensions is very reasonable.
  • curbing the practice of pension spiking.  A nice way to scam the system.  Let's also include "air time."  Why is overtime even included in pension calculations?
  • double dipping, which is when a worker collects a state pension while working at a new public sector job.  Let's also ask why a person can collect multiple pensions at all?

Next let's talk about the unfunded obligations, which Mr. Low completely ignores and is the source of most concern.

We have to ask ourselves why are the benefits for public employees so much greater than private sector employees?  Is it fair for taxpayers to provide lifetime benefits unavailable to us?

— areeda

Stop the “money grab”

California's public unions care more about their members than our state.  At a time when over 70% of employees in the private sector have 401K's, why should the state offer a pension to their employees. As a taxpayer, I support the state doing everything within their power to bring our state budget in line with reality. The state's unions are taking money away from our schools and our kids. This 'money grab' cannot be allowed to happen...

— Beachboy

Stop lavishing money on officers, firefighters and prison guards

Time to separate the wheat from the chaff.

Many in government have realistic pensions and meaningful contributions.

The big three: Cops, Firefighters and Prison Guards do not.  They have lavish excessive pensions allowing them to retire at 50 or 55 taking 3% a year of service against their highest single year of income. They have worker comp rules that say the State has to prove an injury or health issue like Heart Disease was not caused the job or they can get a disability pension which exempts most of their pension from TAXES!

CalPERS shows that these safety workers that need early retirement and the worker comp plans actually out live the general population. Current life expectancy according to CalPERS is 87+ years for male police safety worker retirees and active duty. That includes those killed in duty.

For the U.S. male population currently middle aged, the life expectancy is 78 years.

— SoCal_Bozo

We need to even the playing field

Self-serving propaganda for beneficiaries of the current system.  Why should state and local public employees not assume the same risks as the private sector?  Federal employees have long been on a like system, so you can't say it doesn't work.  The worst part was the "we're doing this for you" summation.  You were correct that some in California will retire at the poverty level, but you left out the part of how they lost their income to tax revenues used to pay for public employee pensions that certainly won't qualify for the 99% class.

— TimBowman

Treat public pensions like private 401k plans

If studies conclude that CalPERS and other government investment mavens provide better investment returns than other funds, fine.  Set up government 401k plans, and let the workers choose to have CalPERS manage their money.    

The taxpayer no longer has contingent liability for underfunded pensions, and the best investment returns result (assuming one believes the supposedly risk-adjusted studies).  In addition, the employees have the added benefit of opting NOT to use CalPERS — that "free to choose" thingy.  

Plus the employees would then own their own earmarked accounts — accounts which are truly theirs (and not subject to government policy changes or bankruptcies).

Problem solved.

— Richard Rider

Low says the sky isn’t falling – but it will start to in 2015

If you really want to understand California’s pension problems, read this article. It's long and it rambles a bit, but it lays out the economic picture.

www.vanityfair.com/business/features/2011/11/michael-lewis-201111

“It shows that the city’s [San Jose’s] pension costs when he first became interested in the subject were projected to run $73 million a year. This year they would be $245 million: pension and healthcare costs of retired workers now are more than half the budget. In three years’ time pension costs alone would come to $400 million, though “if you were to adjust for real life expectancy it is more like $650 million.” Legally obliged to meet these costs, the city can respond only by cutting elsewhere. As a result, San Jose, once run by 7,450 city workers, was now being run by 5,400 city workers. The city was back to staffing levels of 1988, when it had a quarter of a million fewer residents… By 2014, Reed had calculated, a city of a million people, the 10th-largest city in the United States, would be serviced by 1,600 public workers.”

This is what's waiting for Los Angeles. In 2015, public employee retirement costs will consume 30% of the entire budget. In 2020, retirement costs will consume over 50% of the budget. Massive employee cutbacks are going to begin 2014-2015, but nobody wants to talk about it.

— tomdavis

*For clarity purposes, spelling errors in the above comments have been corrected.

RELATED:

Pay it forward, Californians

A starting point on pensions

Support Brown's pension plan

Gov. Brown shifts pension reform into gear

— Alexandra Le Tellier

Gov. Jerry Brown gestures to a chart showing some of his proposals to rollback public employee pension benefits during a news conference at the Capitol in Sacramento on Oct. 27. Credit: Rich Pedroncelli / Associated Press Photo

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