Pension Reform Is On The Way

Let’s be realistic. No matter how dire the situation gets, there’s no way our brain-dead state legislature will ever find their way out of California’s massive black hole of public employee pensions. Most of our representatives are too entrenched, too well-lobbied and too gutless to take effective action against the powerful public employee unions.

Thankfully someone is going to put real reform out for a vote to the people. Our Friends over at the California Foundation for Fiscal Responsibility have filed two pension reform initiatives with the state Attorney General’s office on Thursday, which will be put on the 2010 California ballot after the foundation gathers enough signatures to qualify.

Say, how did that happen?

The initiatives would apply a benefits cap to the benefit plans offered to all new state, local government, school district, university and special district employees beginning July 1, 2011. Savings to taxpayers are expected to reach over 500 billion dollars over the next 30 years if adopted.

The plan saves money by limiting guaranteed benefits for government works to 75% of pay and requiring employees to wait until they reach MediCare eligibility age before retiree health benefits kick in.

California will never escape the budget crisis and its massive unfunded pension liabilities without enacting legislation built on solid fiscal principles. CFFR spells out the new rules in “The 10 Commandments”

  • Honor all pension contracts
  • Death and disability benefits shall not be changed
  • Pension benefits must be fair and adequate
  • Pension benefits must be guaranteed
  • Pension spiking abuse must be discouraged
  • Future generations should not pay retirement costs for today’s workers
  • Retiree health funds must not be diverted to any other purpose
  • Retirement benefit costs must be sustainable
  • Local agency voters shall retain the right to change benefits
  • Bankruptcies must be avoided

Democrat Bill Lockyer has admitted that the state will go bankrupt without serious changes to the pension system. Will angry voters support reform in 2010? I think so.

4 Replies to “Pension Reform Is On The Way”

  1. I’m a teacher in California with a level 2 clear credential. I will gladly support this initative in order to provide for the education of our future generations. Please join me in supporting this, I hope I will not be alone in my profession to see the benefits of temperance now in this difficult time for security in the future of our next generations education.

    Thank you the tax payer for the opportunity to positively impact this next generation. I am fully aware that it is only through the tax payers I am employed!

  2. the goal for most overpaid middle management snivelservants is to retire with a hefty pension then be rehired as a “consultant”.
    factor the pension, then consultant salary then the salary of the snivelservant who replaced the retired snivelservant that adds up to three paychecks the private sector must cut to the government

  3. As a college professor, I can support legislation that limits “lifetime benefits”.

    75% pay seems a little low. I don’t think that will fly and it doesn’t seem like a good idea. That means a postal worker making $30 per hour would retire and collect on $22.5 for 20-30 years or more without a cost of living adjustment. Where is the incentive to stay with a company for any significant length of time?
    Better would be to have these union proposals vetted through independent audits paid for by the party initiating the revisions. Does the proposal make fiscal sense and is it responsible? Is it paid for by the employee or the employer or some combination? Is it a detriment to the employer?

    Also, by limiting the retirement pay to 75% you (the law) are saying “…even though you have put $2million in the IRA, you can only have 75%.” That doesn’t make sense. I suppose I would have to see the language of the proposed law before getting too excited about a thumbnail sketch.

    It is irresponsible for any employee (CEO or lineman) to take benefits that will likely cause harm to the well being of the company.

  4. I support the general idea of reducing pension cost to the taxpayer, but what about the folks already in PERS 3% @ 50. Are you telling me that current police officers with 25 years experience who are 50 years old will continue to work until they are 58 for the same benefits. They are also likely administrators. Who will be running our police agencies, a bunch of Gen – X employees who call in sick all the time? A two-tiered system is the way to go. It allows the employees who built there lives around their potential retirement income to continue to work and then retire. The new hires will be burdened by paying their own freight and the experienced people won’t quit? Anyone else have a reasonable idea?

Leave a Reply

Your email address will not be published. Required fields are marked *