Tag Archives: retirement

New website reveals billionaire’s campaign to dismantle retirement security

by Carolyn Constantino

A new website reveals that Enron-billionaire John Arnold has spent up to $50 million of his own fortune to dismantle retirement plans for firefighters, nurses, teachers and other public employees.

The website – Truth About John Arnold – is sponsored by the National Public Pension Coalition (NPPC) and Californians for Retirement Security and traces the wide financial influence that one billionaire has on public pension fights. John Arnold amassed his fortune as an Enron trader, where he earned an $8 million bonus as the company’s collapse decimated $1.5 billion in public pension assets. Arnold turned his $8 million into billions as a Wall Street hedge fund manager.

Dave Low, California School Employees Association (CSEA) Executive Director and Chairman of Californians for Retirement Security explains,

“John Arnold is the second youngest billionaire in America. John Arnold has decided to spend his billions to take hard earned retirement benefits away from school bus drivers, teachers, nurses, firefighters and other public employees. What is in the heart of someone who, having become one of the richest people on the planet, decides to use that wealth to undermine the retirement security of working class Americans who have dedicated their entire careers to public service?”

Arnold’s spending has touched every facet of anti-retirement campaigning, including tainted research, political advocacy organizations, ballot initiatives, journalism, and the campaign coffers of extreme politicians. He is involved in battles to limit retirement security across the country through his foundation, the Laura and John Arnold Foundation, and his political PAC, Action Now.

“Lawmakers, workers, and the public at large deserve to know that the funding to dismantle retirement security for firefighters, nurses, teachers and other public employees across the country can be traced back to one source – Enron-billionaire John Arnold,” said Bailey Childers, Executive Director of NPPC.

The truth about John Arnold:

– In 2013, Arnold was the leading financier of former San Jose Mayor Chuck Reed’s failed effort to put a statewide pension-gutting initiative on the ballot.

– Arnold was the lead financier ($150,000) of an effort to end public pensions in Ventura County. A judge declared the effort unconstitutional.

– Arnold spent more than $1 million dollars on a ballot initiative in Phoenix to close the pension system. That effort was defeated by voters in 2014.

– The Laura and John Arnold Foundation underwrote a PBS series called “Pension Peril.” The PBS Ombudsman declared the $3.5 million contribution inappropriate. The grant was returned and the series pulled from the air.

– Arnold underwrites Pew Charitable Trusts’ pension work with a $4.85 million contribution.

Learn more about John Arnold here.

Cross-posted from CSEA.

Career Politician Teams Up With Enron Billionaire to Gut Californians’ Retirement

by Steve Smith, California Labor Federation

It’s official. San Jose Mayor Chuck Reed, a career politician with backing from a Texas billionaire and former Enron trader, has filed a ballot measure to strip away retirement security from current teachers, firefighters, sanitation workers and other public servants.

According to the Sacramento Bee:

“The Pension Reform Act of 2014” would alter California’s constitution to allow state and local government employers to cut pensions for current workers.

Essentially, this means politicians would have the power to unilaterally slash the retirement of current workers, breaking a promise made to those workers when they were hired. Many of those public workers affected don’t receive Social Security. They have a modest pension that averages around $26,000 per year. They’re not responsible for the financial mess created by the Wall St. collapse, yet politicians like Reed are all too quick to scapegoat them — and out-of-state billionaires like former Enron executive John Arnold are all too happy to exploit them for profit.

This initiative isn’t about giving cities “flexibility,” as Reed and his cronies contend. It’s about blaming the teachers who inspire and motivate our children for a mess that politicians and Wall Street hedge fund managers created. Reed’s flawed initiative won’t bring fiscal stability to troubled cities, but it would drive a lot of talented, dedicated people away from serving our communities. And it unfairly breaks a promise to current workers who often have no other source of retirement.

Reed’s ploy, though, is likely to wither when held up to the light of public scrutiny. Californians don’t like out-of-state special interests like Arnold setting policy for us, nor do we appreciate career politicians with their own agendas pushing flawed proposals.

Californians for Retirement Security Chair Dave Low:

Californians have constantly shown their distaste for measures put on the ballot by Texas interests and secret out-of-state contributors, and we expect this flawed proposal to be no different.

This attack on workers must be beaten back. We simply can’t allow opportunists like Reed and billionaires like Arnold to gut the retirement of California workers. Stay tuned to our blog, www.LaborsEdge.com, for more developments and ways to get involved.

What if Senator Feinstein Retired? (Fantasy Draft)


Warning: gmdate() expects parameter 2 to be long, string given in /home/calitics/public_html/wp-content/plugins/wp-polls/wp-polls.php on line 440

(Cross-posted on DailyKos)

As many of you already know, a recent Field Poll survey was released showing Senator Dianne Feinstein slipping in her approval rating. 43% of California voters surveyed approve of Sen. Feinstein, while 39% disapprove– the highest disapproval rating she’s had since first being elected to office in 1992. While these numbers don’t necessarily spell trouble for California’s senior senator, they do indicate that people are starting to think of a changing of the guards in the Golden State. It most certainly has crossed her mind as well.

There are always politicians and prominent Californians waiting in the wings for political jockeying. With Feinstein reaching 80 years of age soon, more and more elected officials are prepping their resumes and spending extra time coddling donors in preparation for the inevitable.

So it begs the speculative question, who would be ready and able to run a statewide campaign for the United States Senate in the event of Senator Dianne Feinstein’s retirement? Who would make a great Senator? Who should make for a great race? Who would be an abysmal choice? In this “fantasy draft” diary, I’ve narrowed it down to the 13 most probable potential candidates who are at least thinking about a potential run from the Democratic side. All the apparent pros and cons will be listed, and your suggestions/comments are always welcome. And by all means, if you know of any Republicans that would seem likely, include those as well!

Photobucket

1. Lt.Gov. Gavin Newsom- Gavin Newsom is destined for something much bigger than the LG office he currently occupies. There are already rumors that he’s positioning himself to run for House, but being 1 of 435 doesn’t quite sound like what he wants out of life. Don’t get me wrong, Newsom would make a great United States Senator. He’s got the charisma and charm and policy ideas to help shape our country for many years to come. His negatives, however, remain elephants in the room. This IS the guy who slept with his campaign manager’s wife. This IS the guy who ignited a gay marriage firestorm in the height of the Bush era. He’s also the former mayor of San Francisco, the city hated most along the central valley and eastern portion of the state. It seems like a hard road to walk, but in the end he seems most likely to succeed and thrive.

Photobucket

2. Congressman John Garamendi- I will admit I’m a little biased in that I am a huge John Garamendi fan. As our Insurance Commissioner, he did a bang up job protecting consumers. As Lieutenant Governor, he made a statewide presence that seemed unprecedented. Now, as a member of the House of Representatives, Garamendi is fighting for a fairly progressive agenda, and I like that. However, Garamendi has made the appearance of running for every office short of dog catcher– and it’s possible he’s considered that job too at one point. It might also be hard to support an already “older” candidate: the 60’s might still be considered young to most, but in the world of politics that’s up there!

Photobucket

3. Congressman Xavier Becerra- Rep. Becerra is yet another in a long line of California politicians looking for the next step up. After running for LA mayor in 2001, Becerra was once considered to join the Obama Administration as US Trade Representative. He has a leg up in being vocal and policy-driven, and is a member of the House Democratic Leadership (meaning his national fundraising potential is greater than most). However, outside of his LA home base, very few people know who Xavier Becerra is. It will be a huge obstacle to overcome.

Photobucket

4. Congresswoman Loretta Sanchez- A member of the Blue Dog Coalition and Representative of conservative Orange County might make it seem like Loretta Sanchez would fare well with conservatives, but she has been long-considered persona non grata with the Tea Party and is a constant target in her re-election bids. This could make her a great candidate, someone used to the salvos and moderate enough to win over right-leaning independents. This could also make her a highly unpopular candidate with traditional Democrats… you know, the people who she’d HAVE to have on her side to win.

Photobucket

5. Secretary of State Debra Bowen- After a rocky primary battle with LA City Councilwoman Janice Hahn, it seems unlikely that our amazing SoS Debra Bowen would think about putting herself through the rigors of a US Senate race. However, comparing her disappointing CA-36 campaign with a statewide race is highly unfair. Debra Bowen has proven herself to be an effective and popular Secretary of State. She’d have no problem being in the top tier of a potential senate match-up, if she goes with a different campaign team and trusts her instincts a little more.

Photobucket

6. Attorney General Kamala Harris- Perhaps one of the nation’s brightest rising stars in the Democratic Primary, Kamala Harris has the potential to run for governor or US Senate and be instantly considered one of the frontrunners. She’s sharp, bold, brave and charismatic. She is willing to fight, is young, and she’d have the unique potential distinction of being our country’s first Indian American Senator (as far as my recollection serves). The problem with Kamala Harris isn’t necessarily a problem though: Harris is actually on a short list of a different sort. The scuttlebutt in Washington DC is that Kamala Harris tops President Obama’s list for a possible replacement to current US Attorney General Eric Holder in a 2nd Obama administration.

Photobucket

7. Insurance Commissioner Dave Jones- There aren’t any other people on this list more genuinely friendly than Dave Jones (with the exception of Debra Bowen). As a Sacramento City Councilman to state assemblyman and now as Insurance Commissioner, Jones has served us all exceptionally well. He’s brilliant and his heart is in the right place. The problem with Dave Jones is that he’s not built for the United States Senate. In my mind, Dave Jones belongs in the Governor’s Mansion. Trust me, I’d be happy to see this man representing our great state, but there’s a distinct difference in leadership style that Dave has that makes him my dream choice for governor one day.

Photobucket

8. State Senator Kevin De Leon- Sen. De Leon is a former teacher who knows what’s going on in America’s classrooms. He’s seen it all, and that experience is much-needed in the Senate. Much like Rep. Becerra and others down the list, name recognition is going to be a problem. However, Kevin De Leon is a shrewd politician, and his roots travel deep. He’d be an instant favorite with the education crowd, and environmental groups will be pleased with his record. He’d be a dark horse, but one worth wagering on.

Photobucket

9. State Senator Mark Leno- Sen. Leno is one of the few openly LGBT members of the California state legislature. Being a gay Jew might not work in Alabama, but in California it’s a non-issue (maybe even a plus). Leno has long been a champion for the environment, healthcare and equality, making him an instant hit with the grassroots activist folks. It would be hard to dismiss his hemp legalization efforts, but in a state that’s pretty evenly divided on the issue Leno wouldn’t have a hard time moving forward.

Photobucket

10. Assemblyman Isadore Hall- Hardly a household name, Isadore Hall could make the case that he has what it takes to serve us in the Senate. From serving as a community college trustee to serving on the Compton City Council before joining the Assembly, Hall has the potential to bring a distinct voice to Washington, one that speaks up for the urban residents of America that often get overlooked. Of course, many can say his relatively young age (39) and inexperience (joining the Assembly in 2008) might handicap Hall. I wouldn’t be surprised if this rising star ends up proving them all wrong.

Photobucket

11. Assemblywoman Fiona Ma- If ever there was a perfect example of a leader standing up for women & children. From authoring bills on toxic paints in toys to domestic violence, Ma has done a lot for California families. It’s really hard to tell, however, if Ma is genuine or not. Her ambition is slightly unsettling, but it may be just the kind of drive we need in the Senate.

Photobucket

12. Mayor Antonio Villaraigosa (Los Angeles)- Conventional wisdom would say that the former state assembly speaker and mayor of one of the world’s largest cities would be an instant leader in the race to succeed Dianne Feinstein, but unfortunately the candidate would be Antonio Villaraigosa. Mired in scandals over the years, Villaraisgosa represents the backroom politician scheming America loves to hate. Will he raise tons of cash? Yes. Will he campaign hard and for issues we probably will care about? Yes. But will he be a good senator?

Photobucket

13. Mayor Kevin Johnson (Sacramento)- Quite easily the least likely to succeed candidate on this list, Kevin Johnson was mostly just included so I could mention how terrible Kevin Johnson is. Far from being considered intelligent, thoughtful, or concerned about his constituency. The only thing going for Johnson is his ability to snake his way into the limelight to pontificate on whatever issue he thinks he can speak on. As a Sacramentan, I am thoroughly embarrassed of my mayor. BUT, having said that, Johnson has proven that he can raise a lot of money from big named supporters like Gavin Newsom, Charles Barkley, Kamala Harris and even has the attention of the White House. He’d be a contender, but you can bet I’d do all I can to let everyone know just what kind of Senator they’d be getting.

So what are your thoughts? Comments are, as always, welcome!

Wed Jun 22, 2011 at  8:21 AM PT: A POLL has been added… why didn’t I think of this earlier?!?!

Fair Districting?

View Results

Loading ... Loading ...

Cal-PERS and the Coming Attack on Public Workers

I will be hosting a two-hour radio show on KRXA 540 AM this morning at 8, to discuss this and other issues in California politics

Given the recent losses in the stock markets, this news should come as no surprise:

The California Public Employees’ Retirement System portfolio has lost 31.1 percent of its value since peaking last fall, a staggering $81.4 billion drop. CalPERS officials say a “rainy day fund” is helping to defray the losses – for now. But if the market slump continues, they will hit up state and local employers for more money. That’s a painful prospect as California struggles through a fiscal emergency and municipalities cope with the foreclosure crisis and economic downturn.

Cal-PERS has the power to force the state and local governments to increase contributions to make up for shortfalls. That is good for the state economy, because well-funded pensions help provide jobs and ensure that retired workers are financially secure, easing the burden on and creating more job openings for younger workers.

But that’s also a political problem as the costs can cause a political backlash against not just Cal-PERS as an institution, but against public workers for being “greedy” for daring to want a secure and properly funded pension. Already Orange County has decided to put public workers’ pensions to a public vote, a move designed to screw those workers out of a fair retirement.

Here in Northern California public workers have taken the brunt of the blame for the Vallejo bankruptcy. In Pacific Grove, the town next to Monterey, I was treated to the spectacle all year of so-called progressives attacking public workers and Cal-PERS for causing the city’s financial problems (which actually stemmed from poor accounting, giveaways to the politically connected, and a refusal to raise taxes).

As the economic crisis worsens across California well-funded pensions are an absolute necessity. The movement that eventually produced Social Security, for example, was born in California out of a desire to provide for elderly folks without the cost burdening families already mired in Depression.

We run a very real risk in California of this economic and budget crisis dramatically accelerating the destruction of the public sector, the race toward the bottom. It’s important for us to recognize that government jobs and fair wages and benefits promote economic growth. To undermine and cut them at this time would feed the deflationary cycle and worsen the economic picture.

But maybe that’s just what the right-wing wants

Retirees Are Facing a 401(k) Savings Crisis

(Welcome Rep. Miller to Calitics.   – promoted by David Dayen)

Today, I chaired a U.S. House Committee on Education and Labor hearing in San Francisco where we examined how the current financial crisis is affecting retirement savings.  Witnesses told us that after a lifetime of planning and saving, a growing number of retirees are facing shrinking 401(k)s and increasing insecurity as a result of the ongoing financial crisis.  While this crisis may have started on Wall Street, it's Main Street that stands to suffer the most. More than ever before, there is an urgent need to help Americans strengthen their retirement savings.

We also learned today that U.S. Pension Benefit Guaranty Corporation lost at least $3 billion in stock investments during the last fiscal year through August, and invested a significant portion of its funds in mortgage-backed securities. The head of the PBGC, Charles Millard, will testify before the committee on Friday in Washington regarding the agency's financial problems.

Taxpayers subsidize 401(k) plans by $80 billion dollars annually. For a taxpayer investment of this size, we must ensure that the structure of 401(k)s adequately protects the nest eggs of participating workers.

At a minimum, we know that much greater transparency and disclosures in 401(k) investment policies are needed, to protect workers from “hidden” fees that could be eating deeply into their retirement accounts.

And with seniors poised to suffer the most from the current economic turmoil, we must suspend an unfair tax penalty for seniors who don’t take a minimum withdrawal from their depleted retirement accounts, like 401(k)s.  We’ll push to enact legislation based on a bill Rep. Rob Andrews recently introduced, so that seniors who have seen their retirement savings evaporate don’t get penalized for trying to build those savings back up.

At the hearing today, we heard from Roberta Quan, a retired school teacher from San Pablo, CA, who is also caring for her husband who has Alzheimer’s:  “The recent unstable financial crisis is having a devastating effect on my life.  A lifetime of savings in catastrophic decline is demoralizing. The bottom line is that I am retired and unable to re-earn lost funds.”

Steve Carroll, a retired writer from Petaluma, CA, told us: “Our monthly budget has been severely depleted for life.  We still have our IRAs. But, as they are in mutual stock funds they are so far down in value that selling any of them right now, as the law requires of [my partner] Chuck, the loss would be an enormous percentage of the investment.”

Current regulations require account holders of 401(k)-type account to withdraw a minimum amount of money every year after they reach 70 ½ years old. If seniors do not take out a minimum amount based on an Internal Revenue Service formula, they are subject to a 50 percent penalty. For instance, if an individual fails to withdraw $4,000, they would be assessed a $2,000 tax the next year.

Registered investment advisor Mark Davis told us that a temporary repeal of minimum required distribution rules could help some retirees.  On October 10, Rep. Andrews and I called on U.S. Treasury Secretary Henry Paulson to suspend the tax penalty for retirees who are forced to make withdrawals but want to have additional time to rebuild their retirement savings.

Other witnesses spoke about problems with the current retirement security system where individually directed 401(k)-type plans have become a worker's main retirement savings vehicle. Where investment decisions were once made by professionals managing a traditional pension portfolio on behalf of workers, the responsibility of picking the right investments and implementing retirement savings strategies are left up to an individual account holder.

The Education and Labor Committee passed legislation earlier in the year that would help workers shop around for the best retirement investment options by providing complete information on the fees taken from their retirement accounts. According to the Government Accountability Office, a 1 percentage point difference in fees can reduce retirement benefits by nearly 20 percent.

We started this investigation last week, as part of a series of hearings the House is conducting to investigate the causes of the financial crisis, and what additional steps are needed to protect homeowners, workers, and families.

Last week, Peter Orszag, the director of the Congressional Budget Office, told us that American workers have lost more than $2 trillion in retirement savings over the last fifteen months – an astonishing loss that could lead workers to delay their retirement.

Several experts also told us that workers closest to retirement could suffer the most from this financial tsunami.  But while the housing and financial crises are intensifying retirement insecurity, we also know that workers’ retirement savings have been declining for quite some time.  Rising unemployment, stagnating wages and benefits, and a shift away from more traditional defined-benefit pension plans have been making it much harder for workers to save for retirement while juggling other expenses.

Now, the number of investors taking loans on their 401(k) accounts is increasing. And hardship withdrawals are also increasing. T. Rowe Price estimates a 14 percent increase in hardship withdrawals just in the first eight months of 2008. And, all the signs point to an increased frequency of 401(k) loans and hardship withdrawals in the coming year.

As other committees’ hearings have revealed, many of the Wall Street titans responsible for this crisis have still escaped with their plush perks, lavish spa trips and golden parachutes intact. This is an outrage. For too long, the Bush administration anything goes economic policy allowed Wall Street to go unchecked.

As we look at how we can rebuild workers’ retirement savings and our nation’s economy, the Democratic Congress will continue to conduct this much-needed oversight on behalf of the American people.

Being able to save for retirement after a lifetime of hard work has always been a core tenet of the American Dream. We can’t allow the promise of a secure retirement for workers to become a casualty of the financial crisis.

Cross-posted at the EdLabor Journal.

Former Assemblyman wants to change public pension system

by Randy Bayne
X-posted from The Bayne of Blog

“It’s not fair that people in the private sector are working well into their 60s and 70s to pay for extravagant pensions for public employees who can retire at 50 or 55,” said [Keith] Richman, a former Republican Assemblyman from Northridge who is now president of the California Foundation for Fiscal Responsibility. [Sacramento Bee, 6/22/07]

I would agree, if it were true. It sounds good to say something like this. You have a convenient villain – public employees – but they are hardly getting rich off their early retirements. Truth is, most early retirees have another source of income supplementing their reduced retirement income. Few public employees are receiving “extravagant pensions.”

Also untrue is the lie that “private sector [employees] are working well into their 60s and 70s to pay for extravagant pensions for public employees.” Last time I checked public employees were having retirement deducted from their pay, many in addition to Social Security. Some will be amazed to find out that public employees are also taxpayers, which means public employees pay for their own retirement.

But former Assemblyman Keith Richman isn’t about to let truth or a working system get in the way of his agenda. He is once again on the attack against those evil public employees who are only in if for themselves and wants to “reform” their pension system. He has filed an initiative to do just that.

You remember Richman. He teamed up with Arnold Schwarzenegger in 2005 in an attempt to put new public employees into risky 401(k)-style retirement accounts. His new 2007 version leaves employees in a defined benefit — good — plan but cuts retirement benefits and raises retirement age — bad. He also proposes changes that would base the pension payout on the highest consecutive five years of pay, instead of the one year or three years now in use — bad.

To make his plan more palatable to current employees he is reviving his divide and conquer tactic from 2005. His initiative would only apply to state and local government workers hired after July 1, 2009, forcing public employees into a divisive two-tiered system.

Earlier this year, Governor Schwarzenegger appointed a commission to look into public pensions. The commission is schedule to come out with recommendations in January.

“It seems that Richman is way out ahead of the governor on this one,” said Dave Low of the California School Employees Associaton, one of the Legislature’s appointees to the commission. “Why not wait?”

  J.J. Jelincic, president of the California State Employees Association questioned the rationale for the initiative. He says CalPERS, the state’s biggest pension system is not severely underfunded.

Rather than waste time and money fighting public employees, Richman should be working with the Governor’s commission to study pensions and come up with a legislative solution. But that won’t happen. The commission isn’t likely to find any major problems with the current system, and that just doesn’t work into Richman’s plan.

There is No Crisis

(Cross-posted from Working Californians)

The pension system for California’s teachers, firefighters, peace officers and others who serve the public is fundamentally sound, despite what you have been hearing from Arnold.  In many ways, this mirrors the battle over Social Security in 2005.  You have a Republican politician inventing a “crisis”, in an attempt to privatize a secure working system with a risky and untried plan.  In this case, they want to hike up the age of retirement and switch people over to inefficient 401k plans.  Arnold put together a commission to look at the problem.  They held their first meeting yesterday.

Dave Low, a representative of the California School Employees Association, told Fritz that his 58-year-old sister, a schoolteacher for more than 30 years, is fighting cancer and was recently forced to retire to deal with her illness. The proposal Fritz is backing, Low charged, would leave people like her with a reduced pension and no health benefits.

“This hits close to home,” he said.

Willie Pelote, a representative of the American Federation of State, County and Municipal Employees, his voice rising and falling like a preacher giving a sermon, followed Fritz to the lectern and told the panel not to mess with the status quo.

“You have a safe, secure system for working people,” Pelote said. “There is no crisis.”

(emphasis mine)

The Republicans may be blaming retirement costs on budgetary problems, but the reality is that the PERS and STRS systems are fundamentally strong and near full funding.  In January the Wall Street Journal said:

After years of steep under-funding, pension plans are now healthy, thanks to several years of double-digit investment gains and rising interest rates.

Simply put, PERS and STRS are excellent at earning gains for the retirement system and are much more efficient with money than private retirement funds.  The assets of the fund have almost doubled over the last decade and are at a record high of almost $230 billion.  While market volatility is a concern, CALPERS has instituted a smoothing formula, so that public employees can rely on more uniform pension payments whether stocks go up or down, unlike 401k plans.  On a percentage basis, CalPERS is allocated almost the same amount of public dollars that went into the system 25 years ago.

Funding levels are not perfect but we are at 90% of what we need to provide projected retirements necessary in the future.  That is higher than they were at before the stock boom of the 1990s.  We have a strong system, but there can always be improvements.  Public pensions can be made fairer and there is a package of bills, with labor support, that will provide greater predictability for employers, stabilize the system, eliminate abuse and crack down on those who would game an otherwise sound system.

Retiree health care is an issue that must be addressed, but it is the same problem that is facing all Californians.  Health care costs are increasing at astronomical levels and it is straining the system.  One must not conflate the retirement issue, with health benefits.  They are funded in two completely different ways.  Secure retirements are pre-funded, using employee, employer and pooled investment dollars.  The government has traditionally funded health benefits on a pay-as-you-go basis. 

We should start thinking about creating a new fund to put away money for retiree health care costs in the future.  This would allow the state to create a pooled, low cost, well-managed fund, like pension investments, to earn the vast majority of the money needed to meet projected expenses for retiree health care.  Secondly, but not any less important, we must fix the health care system as a whole, rather than eliminate health care for retired employees.

California already has a severe shortage of peace officers, teachers, and nurses.  Good pensions and benefits are key issues that allow us to recruit and retain the best possible public employees.  It is part of our social contract with these workers.  While they may earn more in the public sector, public employees are promised a secure retirement and benefits package.  We must not break that promise to our hard working teachers, nurses, firefighters, peace officers and others.

The governor’s commission has an opportunity to identify reforms that will provide greater stability and predictability for the well-earned and promised retirements of public employees.  Any attempts by the government and others in his party to invent a “crisis” will be vigorously opposed. 

There is no crisis.

Pension commission gets to work

The newly created Public Employee Post-Employment Benefits Commission started work today. First order of business, deciding whether or not there is actually a pension crisis.

Chairman Gerald Parsky said the panel will find “a calm and reasonable way to educate the public about the magnitude of this issue.” That doesn’t sound like someone who is buying into this being a crisis.

Marcia Fritz, vice president of California Foundation for Fiscal Responsibility, a front group for proponents of risky defined contribution plans, has already declared a pension crisis.

“This is a crisis,” Fritz said in an interview. “We have a liability and we need to stop it from getting worse.”

Fritz and her group need a crisis. It is the only way they can push their favorite solution – a defined contribution plan – onto public employees. California Foundation for Fiscal Responsibility was founded by former Assemblyman Keith Richman who is a champion of defined contribution pensions.

On the other side are employee groups who argue that the state’s retirement system is fiscally sound and that the biggest issue is unfunded retiree health cost. They say that solutions to the unfunded liabilities can be found without going into crisis mode.

“The pension system is largely funded…If you are a nurse, a firefighter, a teacher or a custodial worker you have a safe, secure system,” Willie Pelote, a representative for the American Federation of State, County and Municipal Employees, told the panel. “We can only ask that you deal with the facts. There is no crisis.”

The commission has less than a year to complete their assignment. If all they do is argue about whether or not there is a crisis, what can they possible accomplish in that short time.