California state workers’ pensions under assault

[Hannah Bell]

The California state budget, passed in early October, mandates brutal cuts to social programs as well as pension plans. Governor Arnold Schwarzenegger made “pension reform” a precondition before approving any budget plan...An offensive is now under way to blame California’s fiscal crisis on pensioners and retirees and make them pay for the deficit.

Before signing the October 21 budget bill into law, Schwarzenegger once more attacked pensioners saying, “Pension debt has become the silent thief of our treasury, robbing vital programs such as education, parks, public safety and environmental protection..."

As result of the latest budget agreement, the California Public Employee Retirement System (CalPERS), the largest pension fund in the US, will see a one-time 3 percent wage increase in exchange for a yearly 3 percent contribution from pensioners, in addition to a five-year increase in the retirement age.

Also, the budget stipulates that pensions will now be based on the last three years of employment instead of the pensioner’s highest paid year of employment.

A two-tier system, with reduced benefits for newly hired state workers, is now in effect....On November 9, 95,000 SEIU members voted for pay cuts after the union presented the vote as the only way to prevent furloughs. As a result of the vote, all workers’ contributions will increase by 3 percent. Current workers may retire at age 55 with pensions equal to 2 percent of their pay for every year they work, while newer workers may not retire with these benefits until they are 60. Furlough days have essentially been institutionalized.

http://www.wsws.org/articles/2010/dec2010/pens-d06.shtml

[dkf]

1. And the rest of the population can't retire til they get Medicare.

It's still better to be a California state retiree with all the reductions than to be a private sector worker.

[Hannah Bell]

2. depends on what kind of private sector worker. gov't workers make less on average than comparable

private sector workers. what they used to get in return was more job security.

your broad brush needs to be retired. "private sector workers" include the private sector workers getting 90 billion in bonuses from the largest financial corps.

[dkf]

3. A pension and medical coverage is invaluable.

Most of those getting huge bonuses will only last so long in the industry. Fabrice Tourre knew the score...make your money fast because it will soon end.

[Hannah Bell]

5. those getting huge bonuses run the country. they're the ones taking away both public & private

pensions.

people who think *their* conditions will improve if they can just get rid of those nasty public workers who have it so good are like "good germans".

the ruling class is all about egging on one section of the working class to attack the others, to the detriment of all.

it's sickening that people buy into it.

[quaker bill]

6. Yes, but

one 10 million dollar bonus would be sufficient for me. I am pretty sure I would never work again. I would certainly trade it for my public funded pension.

[Hannah Bell]

8. yeah, one bonus is more than you'd get for your entire retirement from your pension.

same for most people.

my father got $17K from a combination of SS & his pension, & he had worked literally until he could no longer walk.

[OutNow]

4. Hey - don't start comparing state workers to private industry workers

That's what the RW wants you to do, see that the state workers have a few more crumbs that the private workers and use that as an excuse to destroy workers lives and the effectiveness of their unions.

Instead of groveling along at the bottom of the wealth distribution curve - let's start comparing workers compensation to executives. Some part of society got a whole lot richer in the last 20 years, and I'll damn guarantee you it wasn't a California school teacher or nurse.

[quaker bill]

7. you will get in trouble

talking sense like that here.

[Hannah Bell]

9. i believe you should have directed your post to commenter number 1 rather than the op.

[OutNow]

17. Yes

I agree, I should have commented to commenter 1. Man, I think my blood pressure went up 30 points on this topic.

[sarcasmo]

10. This makes me sick, it's the final nail in the coffin of the middle class.

[Monique1]

11. The same is happening in Az

the pension plans are over here in my opinion.

[sarcasmo]

13. Yep, all new hires at my wifes old job receive 401k she is the last of the pensions.

[ProgressiveProfessor]

16. That happened to Feds in the 1980s

[MikeFoxtroters]

12. what percentage

of the state budget goes toward paying for pensions?

[Sirveri]

14. I'd say to raise taxes, but we're not allowed to because the state is totally borked.

And the voters just made it even harder to raise taxes with the last election.

My state level rep is right, we need a constitutional convention, the state isn't governable as it stands currently.

[amborin]

15. let's not forget the questionable investments made with the calpers fund...

http://dealbook.nytimes.com/2009/11/25/calpers-investigates-hedge-fund-oversight/


CalPERS probes oversight of two outside hedge fund advisors
The firms were working without required contracts. The official who oversees the pension fund's $5.8-billion hedge fund portfolio reportedly was disciplined.
November 25, 2009|By Evan Halper and Marc Lifsher
Reporting from Sacramento — California's huge public employee pension fund, under scrutiny after suffering billions of dollars in investment losses, is now investigating its own oversight of hedge fund deals.

As part of the inquiry, California Public Employees' Retirement System officials found that $36 million was paid to two hedge fund advisors who had been working without contracts. The official who oversees the $5.8-billion hedge fund portfolio was temporarily placed on leave and fined, according to people briefed on the matter.


Ads by Google

A CalPERS spokesman declined to discuss the disciplinary action but acknowledged that CalPERS was investigating its dealings with two outside advisors, hedge fund management firm Paamco and a unit of Swiss banking giant UBS.

Both firms have been working with CalPERS since 2003, but their contracts lapsed two years ago. CalPERS continued to do millions of dollars of business with them regardless, which financial experts say exposed the system to legal and financial risk.

"We recently discovered that certain CalPERS controls and procedures were not followed in the last two years," fund spokesman Brad Pacheco said in a statement. "We have taken immediate steps to correct the issues and are working to strengthen our procedures to ensure that all policies are followed correctly and proper controls are in place.

"While we can't talk about specific personnel, we are reviewing the actions taken by our staff," he said.

The disclosure is the latest in a series of incidents tarnishing the reputation of CalPERS, the nation's largest public employees' retirement plan with an investment portfolio of $200 billion. The fund's once-sterling reputation has been rocked by huge investment losses and by revelations of rich fees earned by middlemen who help Wall Street firms win investment capital from CalPERS.

The official placed on leave was Kurt Silberstein, who oversees the CalPERS hedge fund program in his job as senior portfolio manager for global equity, according to people briefed by CalPERS who were not authorized to speak publicly and spoke on the condition they not be named.

These people said that Silberstein was forced to forfeit 10% of his $222,249 annual salary for six months and was placed briefly on administrative leave while the matter was investigated.

[Starry Messenger]

18. recommend.