Pensions | California Policy Center

Volcker Sounds Alarm Over States' Budget Gimmicks and Pension Assumptions

The Volcker Alliance, founded by former Fed chairman Paul Volcker has sounded an alarm over budget gimmicks. The alliance seeks Truth and Integrity in State Budgeting. In the report, the Volcker Alliance examines in detail the budgeting practices of California, New Jersey and Virginia, assessing the effectiveness of each state’s practices. The report highlights the...

By Mike Shedlock

Retiree with $183,690 Annual Pension Attacks Pension Critics

“Critics of public employee retirement benefits are engaging in hyperbole and pointing to potholes as evidence that millions of elderly Californians should be stripped of their retirement savings.” Brian Rice, president, Sacramento Area Fire Fighters, Sacramento Bee, June 2, 2015 Notwithstanding the possibility that saying pension reformers want to see “millions of elderly Californians stripped of their...

By Edward Ring

Look Out For These Pension Gimmicks

State public pension plans are the future, and often current, greatest liabilities that state governments must tackle. Promises made to employees in the past, and politicians kicking the problem further into the future have made the problem spiral out of control. Economists agree that the current discounting of liabilities leaves much to be desired. State...

By Joe Esposito

Pension Reformers are not "The Enemy" of Public Safety

“You will find that powerful financial and investment institutions are the ones promoting the attacks on your pensions. Firms like Berkshire-Hathaway and the Koch brothers are backing political candidates and causes all over the country in the hopes of making this issue relevant and in the mainstream media. Why? Because if they can crack your...

By Edward Ring

To Save Defined Benefit, Unions Need to Accept Investment Realities

Editor’s Note: The president of the California Professional Firefighters union, Lou Paulson, has criticized Mayor Chuck Reed’s pension reform, stating “His idea of pension reform is, you sign up for one pension system, we’re going to change it now in mid career, and now you’re going to get something different.” But Paulson, and anyone who thinks...

By Matthew Vadum

Michigan Court: Reduce Pensions or Reduce Retirement Health Benefits

Editor’s Note: Notwithstanding recent court challenges that could go either way, one way to negotiate meaningful steps towards financially sustainable defined benefit pensions, i.e., reductions or suspensions of COLAs, prospective reductions in the multiplier, increased employee contributions towards the unfunded liability and not just towards the normal contribution, etc., is to offer to reduce OPEB...

By Mike Shedlock

Eureka Faces Pension Headwinds – Just Like Every Other California City

The city of Eureka on the far north coast of our state is part of a fabled land, far removed from the rest of drought stricken California. The winds that the ridiculously resilient ridge of high pressure push north find welcoming mountains and canyons in and around Eureka, drenching them with rain, nourishing endless groves of...

By Edward Ring

Pension Funds and the Ultimate Hedge, Taxpayers

“We’re trying to make these guys’ money toxic because, as we’ve seen, their money is toxic,” Jonathan Westin, the director of New York Communities for Change, told Business Insider on Thursday. “I think it’s connecting the dots that many people don’t always connect.” – “Activists think they found a way to convince Democrats to stay...

By Edward Ring

New Hampshire Police Union Members Resent Pension Reforms

Editor’s Note: This article quotes a New Hampshire police officer, disgruntled about his pension benefit reductions. He claims – and his Facebook quote appears below – that if he’d put 12% of his pay into a 401K he would “be better off.” Here’s what he expected: To work till age 47, with 22 years of...

By Mike Shedlock

LAUSD Offer Worth $122,938 Per Year – Will They Strike Anyway?

“Our demands, they’re not radical. When did it become radical to have class sizes that you could actually teach in? When did it become radical to have staffing and to pay people back after eight years of nothing?” – Alex Caputo Pearl, President, UTLA, February 26, 2015, Los Angeles Times If the 35,000 members of the...

By Edward Ring

Illinois Pension Plans 39% Funded – Taxpayers On the Hook

Editor’s Note: When it happened in Detroit, they said it couldn’t happen in Chicago. Most Californians will agree that our economy is bigger, and more diverse and resilient than that of Illinois or Michigan. But pension fund solvency relies on perpetual bull market rates of return – and the moment the market hiccoughs again, California’s...

By Mike Shedlock

The Glass Jaw of Pension Funds is Asset Bubbles

“Calpers argued that the California constitution’s guarantee of contracts shielded pensions from cuts in bankruptcy. The fund also asserted sovereign immunity and police powers as an ‘arm of the state,’ including a lien on municipal assets.” – Wall Street Journal Editorial, “Calpers Gets Schooled,” February 8, 2015 If you want powerful evidence of crony capitalism...

By Edward Ring

Public Sector Pay: Transparency and Perspective

Public sector labor leaders in California would rather that the public remain relatively ignorant about how well their members are compensated. But they are fighting a losing battle. Because of California’s massive unfunded pension liability and other scandals, the public is demanding answers. Interests as diverse as taxpayer groups, business organizations, the media and some...

By Jon Coupal

Is Deficient Recruiting the Real Reason for Police Understaffing in San Diego?

Whenever there is a shortage of police personnel in a California city, a common reason cited is inadequate pay. When officers at a particular agency are paid less than their counterparts at some other agency, so the theory goes, they quit in order to start working where they can make more. This seems to be...

By Edward Ring