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Glazer, Baker talking pension reform at joint appearance Monday night

California pension liabilities to kick off legislators' Bipartisan Speaker Series

The Tri-Valley's representatives in the State Legislature, State Senator Steve Glazer (D-Orinda) and Assemblywoman Catharine Baker (R-San Ramon), are set to kick off their 2018 Bipartisan Speaker Series with a discussion on pension reform Monday evening in San Ramon.

Glazer and Baker will talk about tackling the state's growing pension liability during the joint presentation at San Ramon City Hall.

"As pension liabilities continue to soar, California faces a looming fiscal crisis that could cripple California’s ability to offer basic services," Glazer said. "This is the sleeper issue of our time, and if we don’t act on it, we will be forced to make budgetary decisions that will create extreme hardships on families across the state."

The event will be take place from 6:30-7:30 p.m. Monday in the Council Chamber at San Ramon City Hall at 7000 Bollinger Canyon Road.

Glazer and Baker will be joined by David Crane, a pension expert and president of Govern for California, a group that supports legislators in confronting difficult fiscal issues. At Monday's event, Crane will talk about how growing pension liabilities stress the California economy.

The two local politicians have held over a dozen bipartisan town hall meetings over the last two years, aiming to break down partisan divides in confronting California's problems.

"Our pension system is already crowding out essential government services, and threatening our future financial health," Baker said. "It is our duty to put politics aside, and find a long-term solution while economic times are better. We should not kick the can down the road, and wait until economic times are worse, and the crisis deeper."

Comments

2 people like this
Posted by Tough Love
a resident of another community
on Jan 20, 2018 at 8:37 am

"finding a long-term solution" can only be one thing, that so far has been unpalatable to the Democratically-controlled Legislature....... the need to stop "playing games" with the FUNDING side of things (as THAT ONLY addresses who pay, and when), and VERY materially reduce future service pension accruals. And Public Sector pensions in CA are now so ludicrously excessive, that if reduced in VALUE* by 50% for non-Safety workers and by 75% for Safety workers they would REMAIN greater than those granted comparable Private Sector workers.

* value ...... via formula reductions, retirement age increases, and ending COLAs (that are virtually unheard of in Private Sector Plans)


Like this comment
Posted by Stephen Douglas
a resident of another community
on Jan 20, 2018 at 9:23 am

"Our pension system is already crowding out essential government services, and threatening our future financial health..."

The main reason for the current "crowding out" is the same reason your 401(k) or IRA is far short of what you expected. The same reason the "Top 25 Corporate Pension Plans Alone Are Underfunded By Over $225 Billion" (Zerohedge). The same reason many union pension funds are in crisis.
Some claim the "reason" for California pension underfunding is excessive pensions, specifically as a result of SB400. Google "global pension crisis"... SB400 did not cause that.

Although there were, and still are, underlying causes (which require actual pension "reform", rather than just pension "reduction"), the elephant in the room is the "Greatest Recession" of 2008.
There are other states (New York) which have pensions and pay as great or greater than California, which are now fully funded. And other states with lower pensions than California which are grossly underfunded.

For a reasonably balanced look at public pensions, read Girard Miller's "Pension Puffery"

"One of my pet peeves in the ongoing debates over public pension reform is the way partisans on each side try to pitch half-truths and myths to support their arguments."
"In an effort to start the new year with a clean slate for public debate, I’d like to set the record straight on a dozen of the most glaring fallacies and silly slogans."

And it does involve reducing ...some... pensions, in addition to governance reforms. Wholesale systemwide cuts of "50% to 75%" are "Pension Crockery".


2 people like this
Posted by T B
a resident of another community
on Jan 20, 2018 at 9:32 am

Move everyone to Social Security

Here's my solution:

Web Link

Thoughts?


Like this comment
Posted by Tough Luck
a resident of another community
on Jan 20, 2018 at 9:49 am

Several of the posts here are from serial critics of defined benefit pension plans that post coast to coast on various blogs with the same message. My role is to make sure readers know that.


2 people like this
Posted by Tough Love
a resident of another community
on Jan 20, 2018 at 8:41 pm

Quoting Tough Luck ............

"Several of the posts here are from serial critics of defined benefit pension plans that post coast to coast on various blogs with the same message. My role is to make sure readers know that. "

In a comment above,I made the following statement:

"Public Sector pensions in CA are now so ludicrously excessive, that if reduced in VALUE* by 50% for non-Safety workers and by 75% for Safety workers they would REMAIN greater than those granted comparable Private Sector workers."

To make it clear, the my above statement is 100% accurate.


Like this comment
Posted by Omnefos
a resident of another community
on Jan 21, 2018 at 10:33 am

if reduced in VALUE* by 50% for non-Safety workers and by 75% for Safety workers they would REMAIN greater than those granted comparable Private Sector workers.

* value ...... via formula reductions, retirement age increases, and ending COLAs (that are virtually unheard of in Private Sector Plans)

Another cry from someone with terminal pension envy!


1 person likes this
Posted by Tough Love
a resident of another community
on Jan 21, 2018 at 5:44 pm

Omndfos,

Who would be a better arbiter than an unbiased/uninvolved actuary?

I challenge you to find an experienced/credentialed actuary (preferably an actuary with FSA/EA credentials and practicing in the Public pension Sector) who would disagree that the above statement is not accurate when the Private Sector workers (to which Public Sector workers are compared) retire at the SAME age, with the SAME service, and the SAME wages.

It's real easy (especially when you have a vested interest leaving Public Sector pensions unchanged ...... as CA's Public Sector workers/retirees now do) to simply "proclaim" that those who seek reform are doing so due to "pension envy", but it doesn't mean that what reformers say (whether envious or not) is not accurate and a legitimate basis for Public Sector pension reform.


2 people like this
Posted by Stephen Douglas
a resident of another community
on Jan 21, 2018 at 7:17 pm

An interesting challenge. Who indeed would be a better arbiter?

One would assume that you have a link to an experienced/credentialed actuary (preferably an actuary with FSA/EA credentials and practicing in the Public pension Sector) who can substantiate your claim, n'est-ce pas?

While they are at it, perhaps they could compare the total compensation of said public workers vs. private. After all, it is common knowledge that public sector pensions are typically higher than the those in the private sector, while, on average, public sector wages are lower.

I have heard that it is not valid to compare pensions outside the context of total compensation.

We would not want to be invalid.


6 people like this
Posted by Bill
a resident of Livermore
on Jan 22, 2018 at 9:53 am

Some one please explain to me how any pension system can keep/continue paying out monthly monetary benefits, to individuals who are not working, the same amount that individuals are being paid to currently work. The politicians have made short sited political promises that they knew would some day collapse under the very real weight of the "Unfunded Liabilities" definition. The fix that will need to be implemented is going to be very painful but extremely necessary to avoid a State of California economic disaster.


2 people like this
Posted by Spudly
a resident of Laguna Oaks
on Jan 22, 2018 at 11:02 am

@TB

Your plan in your link is beautiful but will not happen. The "basic tenants of the ARA..." make too much sense.


Like this comment
Posted by Stephen Douglas
a resident of another community
on Jan 22, 2018 at 1:21 pm

Bill,

First, what you describe is very rare. Most retirees do not get anywhere near "full pay" in retirement. Yes, there are some, but they are the exception.

Second, invest twenty percent of your salary, every year from day one. Then you can withdraw annually an amount nearly equal to your final pay for at least thirty years of retirement.

This may be possible for a single investor, but, due to pooling of longevity risk and investment risk, it is much more likely to do so in a defined benefit system.


3 people like this
Posted by Tough Love
a resident of another community
on Jan 22, 2018 at 1:42 pm

Quoting Stephen Douglas ......

"First, what you describe is very rare. Most retirees do not get anywhere near "full pay" in retirement. Yes, there are some, but they are the exception."

Well, MANY Safety workers DO work full (25-30 years careers) and therefore get quite cloase to receiving 100% of their final (Gross) wages .... and far more on a (net) basis because they no longer contribute towards their pensions.

And many FULL-Career non-safety workers can get 75% of pay ...... almost as ridiculous as safety worker pensions given that VERY VERY VERY few Private Sector workers even get 50% of final pay (and with ZERO COLA-increases) after a far LONGER career.
--------------------------------------------------
Quoting Stephen Douglas ......

"Second, invest twenty percent of your salary, every year from day one. Then you can withdraw annually an amount nearly equal to your final pay for at least thirty years of retirement. "

#1 ... Public Sector workers don't contribute anywhere near 20% of pay.
#2 ... Public Sector workers assume ZERO risk via their DB Plans and ZERO-risk investments yield about 3% today. With that return your statement is FAR from accurate. If you desire a greater return you have to take some "risk", but Public Sector workers refuse to do so. You can't have it both ways.
#3 ... You didn't include the fact that Public Sector pensions are COLA-increased which increases their cost by 25% to 35% (depending on the age at retirement and the specifics of the COLA-provision).


Like this comment
Posted by Stephen Douglas
a resident of another community
on Jan 22, 2018 at 7:39 pm

"To make it clear, the my above statement is 100% accurate."


Like this comment
Posted by Tough Love
a resident of another community
on Jan 22, 2018 at 8:04 pm

As is my above response to your earlier comment, Mr. Douglas.


3 people like this
Posted by Wilma
a resident of Alisal Elementary School
on Jan 23, 2018 at 10:26 am

Wilma is a registered user.

Before going into private sector work 15 years ago, I accumulated 15 years of service in the CalPers retirement system. Life time medical coverage provided by some public agencies for retirees abd their family should be eliminated immediately and everyone should be phased into the Social Security System. The reason public agencies wont is because it is far too lucrative to stay with the CalPers benefits. Long gone is lower public employee salaries with a trade off being better benefits. Salaries in government jobs particularly city and special district agencies are at market rate and the benefits far exceed private sector jobs. CalPers even holds classes on a regular basis on how to game the system or better said maximize your retirement checks. I have friends who retired at 55 and make more money than I do working full time and Im an upper middle class income.


Like this comment
Posted by Jimmy The Jet
a resident of Another Pleasanton neighborhood
on Jan 23, 2018 at 1:45 pm

Jimmy The Jet is a registered user.

Hi All,
Please define "Public Sector workers" and "Public Safety workers", "Private Sector workers", and others . Are we comparing Apples to apple? Same level of education (MBA to no college), years of service, etc...
If a Private sector job is anything from working construction to an engineer at Google then how can we take an average and compare that with a firefighter? (Private sector v. Public worker)

"Public Sector workers assume ZERO risk via their DB Plans and ZERO-risk investments yield about 3% today."

There are other risks that workers take on that have nothing to do with DB Plans.


Like this comment
Posted by D. C.
a resident of Danville
on Jan 23, 2018 at 3:13 pm

Teachers can’t get social security. They often work 30-40 years for lower pay than peers with the same education. The pension is what keeps them in an increasingly difficult career fraught with nightly grading, stress, and little respect for the job they work so hard to do. If they go into (or came from) the private sector, they have to forfeit one of the pensions for the other. When one looks at the pay over a lifetime, lack of social security, and the hard, stressful work, what they get still doesn’t come close to many occupations of educated professionals. Teachers deserve every penny of their pensions.


4 people like this
Posted by Cut the pensions now
a resident of Downtown
on Jan 23, 2018 at 5:56 pm

@DC, teachers don't get SS because they don't pay into it. Their pensions through STRS are more than generous considering that few of them fund it with any of their own money.

Public safety officers are cops, firemen, prison guards, CHP and maybe a few more. They have the 3% at 50 rule with CALPERS. Three percent of their final salary (spiked of course) at age 50. If they worked for 30 years that works out to 90% of their final earnings (spiked!) and they also get COLAs plus in many cases they get all raises that are awarded to currently working employees. It generally takes less than two years for them to be making MORE than when they worked, they can be as young as 52, and if they take other employment it does not reduce their pensions. Many of them paid nothing into their retirements. This is simply not sustainable. The maximum should be 2% at age 55 and no spiking allowed, just the contractual wage for the final year.


Like this comment
Posted by Dark Father
a resident of Ruby Hill
on Jan 23, 2018 at 8:04 pm

@Cut

Agree about spiking.

Where do you see that teachers don't pay into STRS? I was under the impression they contributed something like 8% of every paycheck.

DF


2 people like this
Posted by Tough Love
a resident of another community
on Jan 23, 2018 at 9:16 pm

To Dark Father..........

Cut the Pensions Now said ...."@DC, teachers don't get SS because they don't pay into it."

SS stands for Social Security. Ne never said that teachers didn't pay into STIRS.
______________________

And let me add that Teachers BENEFIT by NOT participating in SS because for most, SS is a VERY lousy return on contributions paid in.


Like this comment
Posted by FalseNews & AlternativeFacts
a resident of Mission Park
on Jan 23, 2018 at 9:58 pm

@ Jimmy the jet
and all

The event was very informative.

Many of the questions in this thread were addressed.

If available on video, it is worthwhile to watch.

Public Sector employees DO have risk. this was pointed out during the meeting. The only public sector workers who have no risk (of losing/reduction of pension benefits)are employees of the State of Cal...CSU, Prison, Courts, etc

It was pointed out that employees of the UC system do not have this State guarantee of a DB pension.

UC could declare BK.

Also pointed out were the BKs of Stockton, San Bernardino, Vallejo...all those public employees of those cities took a significant reduction of their pension & health benefits.

How CA got into this predicament was also a topic.

John


Like this comment
Posted by urmomz
a resident of Avignon
on Jan 24, 2018 at 7:18 am

"Before going into private sector work 15 years ago, I accumulated 15 years of service in the CalPers retirement system. Life time medical coverage provided by some public agencies for retirees abd their family should be eliminated immediately and everyone should be phased into the Social Security System. The reason public agencies wont is because it is far too lucrative to stay with the CalPers benefits. Long gone is lower public employee salaries with a trade off being better benefits. Salaries in government jobs particularly city and special district agencies are at market rate and the benefits far exceed private sector jobs. CalPers even holds classes on a regular basis on how to game the system or better said maximize your retirement checks. I have friends who retired at 55 and make more money than I do working full time and Im an upper middle class income."

Wilma -

This begs the question... why did you leave public service then? If the grass is so much better in the public sector, certainly you never would have left to pursue different opportunities in the private sector.


Like this comment
Posted by Dark Father
a resident of Ruby Hill
on Jan 24, 2018 at 8:06 am

@Tough Love

"Their pensions through STRS are more than generous considering that few of them fund it with any of their own money."

Do you not consider income to be their own money?

DF


2 people like this
Posted by Stephen Douglas
a resident of another community
on Jan 24, 2018 at 3:01 pm

urmomz,

"This begs the question... why did you leave public service then? If the grass is so much better in the public sector, certainly you never would have left to pursue different opportunities in the private sector."

1) "Rule of thumb" If your public sector job is one of the lower level jobs that requires only a HS education and little responsibility, you will earn roughly the same wages as an equivalent private sector job, but far superior benefits. Heads... You win. If your public sector job is professional level/requiring post graduate education, your wages will be far less, on average, than equivalent private sector workers, and the higher pensions will NOT be enough to compensate for the lower wages. Tails... You lose.

2) "Goldilocks scenario" Lower level public workers total compensation is typically higher than similar workers in the private sector. Higher level public workers total compensation is typically lower than similar workers in the private sector. Between those two extremes on the continuum, there is, tautologically, a cohort whose comparable wages + benefits are 'just right".

There are other reasons, of course. My wife left a county job (after about fifteen years, coincidentally) because we moved to be closer to grandchildren. Hers was apparently one of the "just rights" because she found a private sector job with similar compensation.


1 person likes this
Posted by Tough Love
a resident of another community
on Jan 24, 2018 at 5:37 pm

Stephen Douglas,

The statistics may suggest that PHD/Professionals in the Public Sector are compensated less than their Private Sector counterparts, but I doubt that that's true when the the hours-worked are properly accounted for. In the Private Sector CPAs, Lawyers, Doctors, etc. ROUTINELY have 50-60 hour workweeks. You'll never convince me that that's common practice for Public Sector PHD/Professionals.


Like this comment
Posted by Stephen Douglas
a resident of another community
on Jan 24, 2018 at 11:19 pm

It is a shame. A new Gallup study indicates, many government jurisdictions are saddled with a preponderance of unhappy, indifferent and generally unproductive workers who are costing taxpayers billions of dollars in lost productivity.

"...71 percent of the work force was “disengaged” or unenthusiastic about their jobs – and unwilling or incapable of improving their output. By contrast, only 29 percent said they felt fully engaged in their work and eager to improve on the services they provide."

Damn.

But.

"More broadly, employee disengagement across the economy costs the U.S. economy roughly $500 billion a year, which suggests that the problem is just as prevalent -- or more so -- within the private sector."

"... the problem is just as prevalent -- or more so -- within the private sector."
........................................
Believe what you will, Mr. Love, "The statistics may suggest" that you are only fooling yourself.


Sorry, but further commenting on this topic has been closed.

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