Berkeley’s city manager is not unique retiring with a bigger pension than his final salary

By Daniel Borenstein | Contra Costa Times — In November, Berkeley City Manager Phil Kamlarz traded his $250,000-a-year job for retirement with a starting pension of about $266,000 annually. The deal highlights the city’s generous pension program, which is one of the better plans in the state but by no means unique. The costly program is also $420 million underfunded, a shortfall equal to more than three years of city payroll, according to the city’s latest actuarial reports.  Read the entire article . . .

Posted in Column | Comments Off

Why public pensions are so rich

Shifting government workers to 401(k)-style plans would offer greater transparency and keep benefits in line with the private economy.

By Andrew G. Biggs and Jason Richwine | The Wall Street Journal — According to government union leaders, their employee retirement benefits are “not lavish by any means.” So says Art Pulaski of the California Labor Federation. According to the American Federation of Teachers, public-employee pensions “typically are modest.” And the Service Employees International Union asserts that “After decades of full-time work for the state, the sad truth is that far too many retired state employees receive yearly amounts that force them to live in poverty.”

These claims are misleading, but reformers have a hard time conveying to taxpayers precisely how generous public-sector retirement benefits can be. That’s because government employees typically have “defined benefit” pensions that pay a guaranteed benefit regardless of how the plan’s investments may fare. Most private-sector workers hold “defined contribution” 401(k)-type savings accounts that guarantee no specific pension. Complex formulas obscure the fact that public pensions typically are much more generous than 401(k)s, making the situation ripe for misleading claims. Read the entire article (subscription required) . . .

Mr. Biggs is a resident scholar at the American Enterprise Institute.
Mr. Richwine is a senior policy analyst at the Heritage Foundation.

Posted in News | Comments Off

UC regent Crane ousted for telling hard truths about pensions

Editorial | San Francisco Chronicle — David Crane is not the most popular man in Sacramento. In fact, his determination to tell legislators what they don’t want to hear – yet need to hear – is about to cost him his position as a University of California regent. Continue reading . . .

Posted in Editorial | Comments Off

The costly impact of the ‘air time’ public pension perk

Fox Business Network’s Gerri Willis on the impact of the ‘air time’ public pension perk on state governments and taxpayers:

Posted in TV News / Video | Comments Off

New PPIC poll: 83% of Californians say the amount government is spending on public employee pensions is a problem

By Jon Ortiz | Sacramento Bee — Californians, both those in government and those outside of it, support changing public employee pensions, according to a new Public Policy Institute of California survey.

A little more than 8 in 10 of those surveyed said amount of money government is spending on public pensions is a problem, with 44 percent indicating it’s a big problem and 39 percent saying it’s somewhat of a problem.  Continue reading . . .

[To download the PPIC poll, please click here. See pages 4, 15 and 30 for results regarding California's public pensions.]

Posted in News | Comments Off

Stanford group to release new estimates today of unfunded liabilities for CalPERS, CalSTRS and the University of California

The Stanford Institute for Economic Policy Research (SIEPR) this week will release a series of reports documenting the Golden State’s worsening public pension problems.  The reports are authored by Stanford Professor Joe Nation with the assistance of California Common Sense (CACS) researcher and Stanford junior Evan Storms.

Today SIEPR will release a statewide study covering the California Public Employees’ Retirement System (CalPERS), California State Teachers’ Retirement System (CalSTRS), and the University of California Retirement Plan (UCRP).  A press conference call will be held this morning to discuss the statewide findings and information will be listed on the SIEPR website at

Additionally, SIEPR and CACS are releasing a report on the financial well-being of 63 local public pension systems Wednesday, and on San Jose’s two public pension systems Thursday.

CACS will release a suite of interactive data visualizations that illustrate the findings of these reports under a range of assumptions on their website,

Posted in News | Comments Off

Public pension reform will make 2012 the most intense year in California politics since Prop 13

By John Dickerson | Ukiah Daily Journal — Statewide public pension reform will make next year the most intense in California politics since Prop 13.

We will watch a three-player statewide chess game. Jerry Brown recently introduced a 12 point pension reform plan. Californians for Pension Reform (“CPR” ­ get it?) will place a more extensive initiative on next November’s ballot. Unions will use their influence in Sacramento to pass less extensive reform hoping that’s enough.

Rapidly emerging city and county reform efforts will threaten to create a crazy patchwork of different systems. But the main game will be the statewide drama.  Continue reading . . .

Posted in Op-Ed | Comments Off

‘We’ve got to fix the pension system’ says Gov. Brown

By Melinda Meza | KXTV – Gov. Jerry Brown unveiled his 12-point pension plan to lawmakers Thursday.

Brown aims to reform state employee’s pension plan and save $900 million a year.

“A lot of the items I’ll propose in January you are not going to like, “Brown said.

The plan proposed moving new employees to a hybrid system that combines pensions with a 401K style plan. Many employees will have to contribute at least half of their pension costs. Continue reading . . .

Posted in TV News / Video | Comments Off

California Pension Reform testifies on Brown pension plan

Governor’s Proposal Would Solve Less
Than 5% of the State’s Pension Debt

Duf Sundheim of California Pension Reform today offered the following prepared testimony at the Conference Committee on Public Employee Pensions in Sacramento:

“Thank you for the opportunity to testify. My name is Duf Sundheim.   I represent California Pension Reform, the citizens group founded by the late Assemblyman Keith Richman that has drafted a pension reform initiative for the November 2012 ballot.

“Pension reform is not an ideological issue, it is a math issue.  As the Governor, your own legislative analyst and your own reform commission have pointed out, our unfunded pension obligations are having a crushing effect on public safety, education and other vital services.  For example, during the last 4 years San Jose’s retiree benefit expenditures have more than doubled, forcing the city to eliminate 23 percent of its workers. The same is happening all over this state – and it is only going to get worse.  Much worse.

“While we commend the Governor for raising the issue, his plan does not come close to solving the $240 billion problem. Although the Governor says his plan at most would save $11 billion over 30 years, that addresses just 5% of the problem!

Our proposal would save much more, much faster by:

  • Ending abuses such as salary spiking and retroactive benefit increases
  • Reducing unfunded liabilities
  • Making benefits for new workers comparable to benefits in the private sector

“And it accomplishes these goals in a manner approved by the courts and without requiring a reduction of benefits to current employees.

“Let me repeat.  Our initiative does not change the benefits being earned by current employees.  Our measure simply charges current employees more for the same benefits when their pension funds are less than 80% funded.

“We literally can no longer afford to hide in the corner, put our hands over our ears and hope that unrealistic investment returns will make the problem go away.  That is what they did in Greece and we can see how well that worked.

“We’ve seen in recent months that Democratic-controlled legislatures in states with influential unions have significantly reformed their pension systems.  If New York, Rhode Island and New Jersey can do it, so can California.

“One hundred years ago California faced serious problems.  The legislature failed to act and in 1911 the voice of the people was born through the creation of the initiative.

“It is now 2011.  California faces a critical pension crisis.  Hopefully you will act.  If not, the  voice of the people again will be heard.”

Posted in Press Release | Comments Off

Governor faces hurdles on his pension reform proposal

By Sharokina Shams | KCRAWhen lawmakers hear Gov. Jerry Brown’s pension reform plan Thursday, it will be the first time the plan is formally discussed, yet it already has numerous critics.

Aaron McLear

Click on above image for video

Many public workers say it asks too great a sacrifice of them. Another group, called California Pension Reform, has said the plan does not ask enough of state workers and would only make a small dent in the state’s overwhelming pension cost burden.  Continue reading . . .

Posted in TV News / Video | Comments Off

San Jose’s pension costs pose a true fiscal emergency

By Daniel Borenstein | Contra Costa Times — The city of San Jose faces a fiscal death squeeze as it tries to fund ballooning costs of employee retirement benefits.

Daniel BorensteinTo pay the bill, the city must lay off workers. Whereas 10 percent of general fund expenditures went toward pensions and retiree health care in 2007-08, this year it’s 22 percent. In the same four-year period, the city has eliminated 1,592 jobs, or 23 percent of the workforce. It’s going to get worse.

To be sure, other factors contribute to workforce reduction. But retirement costs are the most significant. And of the two key components driving those costs — pensions and health care for retirees — the former accounts for about 85 percent of the bill.  Continue reading . . .

Posted in Column | Comments Off

Cash-strapped cities want workers to contribute more to their pensions

By Catherine Saillant | Los Angeles Times — It’s business as usual at Santa Ana City Hall as residents trickle up to the counter to pay business fees, pick up a dog license or, in a newer wing next door, apply for a free solar permit.

But on the top floor of the eight-story concrete fortress, city officials in Orange County’s most labor-friendly city are doing the once unthinkable: demanding big benefit concessions from their employee unions.

Getting a handle on pension costs in the county’s largest city is a must, officials here say. Santa Ana is facing a $30-million deficit, has only $300,000 in reserves and is jettisoning jobs by the dozens to keep its head above water. Last year, the city paid out about $11.3 million for employee pension costs.  Continue reading . . .

Posted in News | Comments Off

Pension progress in Riverside County

Editorial | The Press-Enterprise — Riverside County cannot close its budget shortfalls while sustaining some of the most lavish retirement benefits around. The county needs to rein in employee costs in order to close a persistent budget gap. And that effort should include county employees paying their share of pension contributions.

The county this week imposed pay and benefit changes on the 5,800 employees belonging to the Service Employees International Union Local 721, after contract negotiations broke down earlier this month. The new contract would save $5.4 million this year, and $23.6 million over three years, county officials say. Much of the savings would come from workers paying more toward their retirements. The county has been paying the employee portion of pension costs for general workers — 8 percent of salary — after the first five years of employment. That outlay is on top of the county’s share, currently 13 percent of payroll for general employees. The new contract requires those workers to pay 3 percent of salary toward pensions starting Dec. 1, climbing to the full 8 percent annually by 2013.  Continue reading . . .

Posted in Editorial | Comments Off

‘Glitch’ in CalPERS’ new $507,000,000 computer system creates bureaucratic mess for widowed spouses

By Jon Ortiz | Sacramento Bee — A glitch with CalPERS’ new half-billion-dollar computer system has delayed death benefit checks to widowed spouses and incorrectly triggered letters notifying some members that their health insurance has been canceled.  Continue reading . . .

Posted in News | Comments Off

Showdowns loom in California over public pensions

By Jim Christie | Reuters — There’s no avoiding a ballot showdown over paring public employee pensions in California’s third-largest city, its mayor said on Wednesday.

San Jose Mayor Chuck Reed told Reuters by telephone he has enough backing from city council members to put his plan for cutting about $100 million a year in pension expenses over two decades to city voters next March.

The council is expected to vote on December 6 on advancing the plan to the ballot. That will involve declaring a fiscal emergency for Silicon Valley’s biggest city, whose unionized employees have been tangling with Reed’s administration over its plans to rein in rising pension costs.  Continue reading . . .

Posted in News | Comments Off

San Jose leaders paint grim budget picture without pension reform

By John Woolfolk | Mercury News — With life hanging in the balance, San Jose police and firefighters will take minutes longer to respond to emergencies. City libraries and community centers, some newly built, will sit locked and empty. There will be no more city recreation programs, and roads will continue to deteriorate.

That was the ugly picture of San Jose’s future that city leaders laid out Tuesday as they unveiled their case for declaring a “fiscal and service-level emergency” to justify rolling back the soaring costs for city workers’ pensions.

“We are in a fiscal crisis,” City Manager Debra Figone said. “Unless the city acts now to reduce these costs, the only choice will be to further reduce services to unacceptable levels. Further reductions of the magnitude necessary to pay retirement costs will cause the health, safety and well-being of our residents to be placed in critical and unacceptable risk.”  Continue reading . . .

Posted in News | Comments Off

Public pressure needed to push California pension reform

By Dick Spotswood | Marin Independent Journal — Until now, it’s been easy for many Marin politicians to dodge responsibility for changing California’s broken public employee retirements system. That’s frustrating because most voters understand that the status quo is not only unsustainable, it’s decimating the ability of state and local governments to provide essential public services.

Too often the elected officials’ approach has been similar to that long voiced by Board of Supervisors President Susan Adams, that changing public pensions is fundamentally a state problem.

Admittedly, our county supervisors and a few cities have taken some early steps toward reform. Yet, they’ve only taken the rough edges off a shattered and discredited system.

Adams isn’t alone when saying that Marin will act only when the state leads. Many officials at the city and special district level, afraid of alienating public-sector unions or harming employee morale, sing the same song. They’ve presumed that no one in Sacramento would ever have the gumption to propose real change.  Continue reading . . .

Posted in Column | Comments Off

UPDATE: Convicted San Diego police officer WILL NOT get $40,000 annual pension

By Crag Gustafson | San Diego Union-Tribune – An ex-San Diego police officer convicted of assaulting women isn’t eligible for a city pension contrary to a report Tuesday by The San Diego Union-Tribune, according to a lawyer with the San Diego City Employees’ Retirement System.  Continue reading . . .

By Crag Gustafson | San Diego Union-Tribune — Anthony Arevalos, the former San Diego police officer convicted of a dozen charges last week after trying to seek sexual favors from women he stopped, is eligible to collect a nearly $40,000-a-year pension from the city when he turns 55. The San Diego Union-Tribune projected Arevalos’ future pension by applying his 17.4 years of service and final annual salary of $75,941 to the standard pension formula the city has negotiated for public-safety workers. If he lives until age 82, he’ll collect more than $1 million in taxpayer-funded payouts. Continue reading . . .

Posted in News | Comments Off

Soaring Marin County pension bill fueled largely by top tier of retirees, study finds

By Nels Johnson | Marin Independent Journal – The soaring cost of Marin County’s pension program is driven in large part by plump benefits for a few hundred retirees at the top, a new study indicates.

Some 30 percent of the Marin County Employee Retirement Association’s pension payroll goes to just 9 percent of retirees who get checks of more than $80,000 a year — including ranking officials, safety officers and others who retired at top pay after long tenures.  Continue reading . . .

Posted in News | Comments Off

San Jose pension crisis tied up in legal quagmire

By Daniel Borenstein | Contra Costa Times — Labor unions try to have it both ways. They fight statewide reform of public employee pension systems by insisting that change must be bargained at the local level. But, as we see in San Jose, when they get to the table they claim they can’t legally agree to substantive improvements.

Welcome to the crazy world of public employee pensions, where benefits are easy to increase, but nearly impossible to reduce — even when they’re unaffordable. The resulting costs squeeze out funds badly needed for police, fire protection, libraries and other essential city services — endangering the jobs of the workers whose unions resist change.

San Jose provides a stunning example:

  • Pensions have soared. Even after adjusting for inflation, the average annual benefit increased 75 percent for police and fire retirees from 1991-2009, and 54 percent for other workers.
  • Police and firefighters who retired in 2009-10 after at least 26 years of service collected an average starting pension of $119,000 a year. For other workers with similar service, the average was $63,500. The pensions come with a guaranteed 3 percent annual cost-of-living adjustment.  Continue reading . . .
  • Posted in Column | Comments Off