Friends With Benefits – Part 17 Legislative Proposal

May 20, 2012

There is an interesting piece in today's S.F. Examiner by state senator Bill Emmerson (R – Riverside County) regarding pension reform. I have not seen an update to the half a trillion estimate, but there are other tricks being performed with the money. Emmerson writes

Both the governor’s proposal and Senate Constitutional Amendment (SCA) 13 would offer new employees a hybrid between the traditional defined benefit pension and the 401(k)-style defined-contribution plan. This would help ensure the sustainability of our pension system while protecting taxpayers from rising costs. Pension spiking — the practice of artificially inflating an employee’s final compensation to maximize retirement benefits — would end along with double-dipping to prohibit the collection of a pension while simultaneously earning a government salary.

The Assembly and Senate appear to have time for lots of nearly trivial legislation. Isn't it time to do something substantive about this ticking timebomb? This is also the state legislators that unilaterally borrowed $1.1 million of B'game's sales taxes two years ago during an "emergency" and may or may not pay it back next July. One man's emergency is another's……oh, nevermind.

Posted in City Finances, County Issues, Friends with Benefits, State Ievel issues

2 responses to “Friends With Benefits – Part 17 Legislative Proposal”

Lorne

June 14, 2012

Per today’s Daily Post article, here’s the recently issued Santa Clara County Grand Jury report on employee benefits & pensions. Findings & Recommendations start on page 26.
http://www.scscourt.org/court_divisions/civil/cgj/2012/pension.pdf
Joe

July 14, 2012

Here’s a short update on one of the many state pension funds’ returns. Not sure if it is also carrying around an assumption of 8% returns, but this isn’t close:
CalSTRS earned a mere 1.8 percent profit on its investments in the just-ended fiscal year, prompting the pension fund to renew its request for financial help from the Legislature.
The return was well below CalSTRS’ official forecast. It also was a fraction of the 23 percent CalSTRS earned the year before.
The 1.8 percent gain translated into a profit of $2.7 billion. The California State Teachers’ Retirement System, the nation’s second-largest public pension fund, ended the fiscal year June 30 with $150.6 billion in assets.
The weak results spotlight the problems facing public pension funds as lawmakers debate the cost of employee retirements in an era of tight budgets.
Gov. Jerry Brown has called for a 12-point plan to rein in pension costs, although he’s been unable to craft a deal with his fellow Democrats who control the Legislature. Earlier this week, Brown scrapped plans to put his pension proposal on the November ballot.
Read more here: http://www.sacbee.com/2012/07/14/4630442/calstrs-earns-just-18-percent#storylink=cpy

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