CFFR’s president Marcia Fritz was on the CBS Evening News again last night. Here are the segment’s opening comments:
When the angry citizens of Bell, California, forced their outrageously overpaid city manager and police chief to resign, it may be the best thing that ever happened to the two. Consider the pension now due city manager Robert Rizzo.
“His lifetime pension will be roughly $30 million,” said Marcia Fritz of the California Foundation for Fiscal Responsibility.
And the pension due police chief Randy Adams.
“His lifetime pension will be more like $15 to $17 million,” said Fritz.
But it’s taxpayers in other cities who will be shelling out for these lavish pensions because in California every city or county an employee worked for has to pick up a portion of the pension. And the pension is based on the final year’s salary alone, reports CBS News correspondent John Blackstone.
For more, read the entire transcript here or watch the video below:
CFFR’s founder and first president Keith Richman died Friday night at UCLA Medical Center in Los Angeles with his wife, Suzan, and family at his side after an extended battle with brain cancer. A resident of the San Fernando Valley, he was a three-term California Assemblyman and an active physician, philanthropist and pension reform advocate. He was 56.
CFFR’s president Marcia Fritz will be speaking this Sunday at the 2010 Global Forum on Modern Direct Democracy, a five-day international event that includes a two-day U.S. Conference on Initiative and Referendum. The event will be held in San Francisco at the UC Hastings College of Law.
Fritz will be participating in a panel titled “Smart Detour or Dead End: Does Initiative & Referendum Provide a Path to Advance Your Agenda?” moderated by Paul Elias of the Associated Press. Other panelists will be: Eric Ehst, Arizona Clean Elections Institute; Rob Kampia, Marijuana Policy Project; Steven Hill, on Instant Runoff Voting; Tim Mooney, Silver Bullet Inc and Save Our Secret Ballot,Nevada; Tim Eyman, Voters Want More Choices, Washington; and Jung-OK Lee, Korea Democracy Foundation.
To get more information on the conference, click here. To see the complete schedule and get information on registration, click here.
On Friday, CFFR’s vice president Jack Dean will be in Washington, DC participating in a conference on public pensions sponsored by the US Chamber of Commerce Foundation titled “What Public Benefit Plans Can Learn from Private Employers.”
Dean will serve as moderator of a panel titled “Will States Need a Bailout?” Participating on the panel will be: Andrew Biggs of the American Enterprise Institute; Keith Brainard, research director of the National Association of State Retirement Administrators; and State Senator Chris Lauzen of Illinois.
You can find more details, including registration information, here.
The entire morning event will be webcast live here, and will be archived online in the near future.
CFFR’s president Marcia Fritz appeared on NBC Nightly News last night commenting on the lavish pensions that will be awaiting the highly-paid officials of the City of Bell when they retire:
Pension data supplied by Marcia was also used by the CBS Evening News. CFFR was credited in the tagline under the info, which appears about halfway through the segment.
CFFR’s vice president Jack Dean appeared Sunday on the weekly public affairs show News Conference hosted by veteran KNBC reporter Conan Nolan. The show airs on Channel 4 in the Los Angeles market immediately following NBC’s Meet the Press. Appearing on the segment prior to Dean was former California governor Gray Davis, who signed the pension-boosting SB400 into law in 1999.
California gubernatorial candidate Jerry Brown appeared Friday evening on Fox 11 News in Los Angeles to discuss pension reform in the wake of pay and pension issues raised in the City of Bell:
Here’s another good story — this time from KNBC-TV Channel 4 — that details the huge pensions involved in the Bell brouhaha using calculations provided by Marcia Fritz, president of CFFR.
The pay and pension brouhaha in the City of Bell kept CFFR’s president Marcia Fritz and vice president Jack Dean busy during the past week dealing with media. Marcia was instrumental in calculating and providing projected pension costs to the media, which helped to shift the focus from exorbitant salaries alone to long-term pension obligations as well. If Bell city manager Robert Rizzo retires and lives another 30 years, he could collect about $30,000,000 over the life of his pension.
Here’s a good summary of the situation reported by Rebecca Hall on KTLA Channel 5 in Los Angeles:
At a press conference held yesterday at the Civic Center Courthouse in San Francisco the following press release was issued by the Civil Grand Jury:
PENSION TSUNAMI: The Billion-Dollar Bubble
During recent periods of economic prosperity our City officials, along with compassionate voters, created relatively generous pensions for many City employees. With the recent downturn in our economy and loss of millions in value from the City’s pension fund, these rapidly increasing costs threaten to jeopardize the City’s financial future. The Office of the Controller estimates that the funding of pension and retiree health benefit costs for fiscal year 2010 is $413 million, which is expected to rise to $1 billion in 2015, approximately a third of the City’s current General Fund. The expected General Fund contribution, which is approximately 61% of the total pension and retiree health benefits costs, will increase annually by $60 million for the next five years. This shift in resources may drastically impact funding to other basic services, affecting all San Franciscans.
Pension Pie: The typical San Francisco public servant will receive a modest pension after many years of service and the Grand Jury is grateful for their dedication and hard work. However, we note that 24% of retired firefighters, 12% of retired police officers, and 1% of miscellaneous (non-safety) employees receive retirement benefits of over $100,000 a year. The California Pension Reform website designates these as “the $100K Club,” and San Francisco has more than 900 retirees in this category.
Forgotten Proposition H: In 2002, San Francisco voters passed Proposition H, a charter amendment changing the formula for Police and Firefighter retirement benefits and mandating that, should the City’s contribution rate to the pension fund exceed 0%, the City and Safety employees’ representatives should “meet and confer” on a “material pension cost-sharing arrangement.” The City’s contribution rate has exceeded 0% since fiscal 2004-05, yet the Jury found no evidence that the City and Safety employee bargaining agents established such a cost-sharing arrangement. The Jury has recommended that the City Attorney seek a court order requiring the SFERS Board to comply with the City Charter.
The Swap: Since 2002 the City has “picked up” the employees’ 7.5% pension contributions for members of the Service Employee International Union (SEIU) Local 1021 and other smaller collective bargaining units (at least 9,883 employees). In May 2010, the City and SEIU Local 1021 entered into an agreement that employees pay their own 7.5% contributions, and, in return, that the City increase the employees’ base wage by 6% or approximately $60 million, effective July 1, 2010. This “swap” was described as “cost neutral” for budgetary purposes. However, the City’s negotiation team apparently failed to consider that the $60 million swap would significantly impact the City’s future pension obligations.
Pension Spiking and Pyramiding: Pension Spiking is an end-of-career promotion or an excessive raise to increase or “spike” workers’ final pensionable income during the last year of employment, the base period for calculating the pension amount. The Jury found that seventy-one Firefighter retirees received a 10% or more increase in pensionable income in their final year before retirement — approximately 68% of the total number of Firefighters who retired over the past 22 months. There were few instances of spiking among Police or other retirees for that period. The Jury also found instances of pension-pyramiding among some nursing supervisors, for example. These retirees have been allowed to hold two concurrent jobs, resulting in dual pensions. The Jury recommends that the City take steps to curb abuses from pension spiking and pension-pyramiding by limiting the final pensionable income an employee can claim at retirement.
The Grand Jury report can be read or downloaded here.
CFFR’s president Marcia Fritz will be testifying this morning at a hearing on public employee pensions being held by California’s Little Hoover Commission. The meeting begins at 9:00 in Room 437 of the State Capitol in Sacramento. The commission will hear from the following:
Teresa Ghilarducci, professor of economic policy analysis at The New School for Social Research in New York City
Marcia Fritz, president of the California Foundation for Fiscal Responsibility
David Low, director of Governmental Relations for the California School Employees Association
Keith Brainard, research director for the National Association of State Retirement Administrators
AB 155 has stalled in the Legislature, but commentator Ginger Rutland of The Sacramento Bee says there is reason to remain vigilant – bad bills have a way of resurfacing:
Governor Arnold Schwarzenegger’s weekly radio address was hosted this week by his Special Advisor for Jobs and Economic Growth, David Crane:
TRANSCRIPT OF COMMENTS BY DAVID CRANE:
Hello, this is David Crane, special advisor to Governor Schwarzenegger for jobs and economic growth, filling in for the Governor with another California Report.
When Governor Schwarzenegger came into office seven years ago, he immediately zeroed-in on the single biggest threat to your government’s fiscal health, its unsustainable pension system.
Over the last 10 years, pension costs for state workers have gone up more than 2,000 percent, crowding out spending on colleges, parks, health, the environment and other progressive programs.
More cuts are in store for those programs because pension costs are scheduled to more than double to $10 billion per year, and that’s the optimistic case because if the stock market itself doesn’t double every ten years, those costs will be even higher.
Worse, pension debt has been hidden from you through evasive accounting by our pension funds that would make even Wall Street blush.
A recent Stanford study shows that California’s pension debt is really half-a-trillion dollars, almost five times the amount officially reported.
That debt was never disclosed to you, much less approved by you, but you are paying for it now and your children will pay even more.
Let me give you just one example. This year, our state will spend more on retirement benefits than it will spend on the 33 campuses and 670,000 students that make up the UC and CSU systems, perversely causing student fees to rise 200 percent at the same time that class offerings are being cut.
This path, set in place in 1999 by a previous administration and the legislature at that time and sustained by misleading pension fund accounting, is simply wrong.
That is why Governor Schwarzenegger has fought tirelessly to address the pension problem.
He knows that failure to fix our pension system means an end to progressive programs or higher taxes, or both.
This week, our state took an important step toward reform.
The Governor reached tentative contract agreements with four state employee unions that include rolling back those 1999 pension increases and requiring increased employee contributions towards their pensions.
Many people said something like this could never happen.
So the Governor’s action is precedent setting, and could trigger similar action by California’s other public employee unions and in states across our nation.
It’s great news, but it’s only a first step.
That’s because California needs comprehensive pension reform, and that includes changes that must be adopted immediately by the legislature, including:
· Rolling back that 1999 expansion of pension benefits
· A permanent increase in employee pension contributions
· An end to the practice of pension spiking and
· Truthful accounting that discloses to you the costs, risks and debts arising from our pension systems.
This week it became clear, the time for pension reform is now.
Every day pension reform is delayed is a day that increases debt and means even greater cuts to progressive programs.
The four unions that agreed to change this week understand the wisdom in reaching a compromise, for the good of the people.
Our lawmakers need to be reminded of the same message, and also of the simple message that one cannot be progressive and at the same time be opposed to pension reform.
Thank you for watching, and thank you for listening.
You can find the press release and a downloadable MP3 audio file here.
A 30-second video explaining the need to reform San Francisco’s city employee pension system has been unveiled by SF Smart Reform:
Signatures are needed by July 1 to qualify the “Sustainable City Employees Benefits Reform Act” for the November ballot. More information is available in this San Francisco Examiner editorial or at the organization’s website where you can also download a petition.
This NBC Bay Area Editorial commentary by Suzanne Shaw titled “California’s Pension Crisis: Are the Golden Years Tarnishing the Golden State?” ran on Friday, June 4 (read the text of the editorial here):
CFFR’s founder and first president Keith Richman died Friday night at UCLA Medical Center in Los Angeles with his wife, Suzan, and family at his side after an extended battle with brain cancer. A resident of the San Fernando Valley, he was a three-term California Assemblyman and an active physician, philanthropist and pension reform advocate. He was 56.
