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The PJ Tatler

by
Stephen Kruiser

Bio

February 10, 2014 - 7:57 pm

Fingers crossed.

A good sign is that Assembly leaders now say they will take on the massive shortfall in the State Teachers Retirement System (CalSTRS) that provides retirement, disability and survivor benefits for California’s 868,493 teachers and their families. Speaker John Perez says he wants to find a way to begin paying down the $80 billion unfunded liability for teacher pensions and the Assembly will hold hearing on the issue this month.

While CalPERS, the other major public employee pension system, is in a weak position, CalSTRS is close to falling into the abyss. However, neither of the systems is likely to ever go over the edge because taxpayers are obligated to maintain their solvency, no matter the cost. This means the sooner the unfunded liability is addressed, the less long-term cost to taxpayers.

Unfortunately, until now, Sacramento’s approach to these unfunded liabilities is probably why the phrase “kicking the can down the road” was coined. Even Governor Brown, who has espoused government frugality and responsibility — while increasing state spending — ignored the unfunded pension systems in his proposed state budget.

In fairness to Brown, two years ago, he proposed a fairly decent pension reform package. But by the time the Legislature got through with the governor’s plan, all that remained was some modest changes to address the worst of pension abuses including a few to prevent “pension spiking.”

As we all know, unfunded pension liabilities are the bane of every liberal-dominated state’s economic existence. It is an issue that has gotten some lip service in recent years where it is a problem but not a lot of action. It is also an issue that will eventually cripple the states plagued by it. A state can guarantee defined benefits and obligate the taxpayers to fund them but it can’t guarantee that there will be taxpayers.

It is with very cautious optimism that those of us who have been screaming for reform until we’ve got no scream left are receiving this news.

Like alcoholics attending their first AA meeting, Speaker Perez and his colleagues deserve credit for taking the first step by acknowledging the problem and making a commitment to address it. Of course the Speaker may have been nudged along after seeing poll results, including one by PPIC that shows that over 80 percent of adults believe that the money spent on pensions is a problem for state and local government budgets. The poll further reveals that more than 70 percent would favor a change from a defined benefit – a guaranteed monthly payout at retirement — to a defined contribution system, similar to a 401(k) plan.

Baby steps, for now. There is still a window of opportunity to fix this. They won’t be enough in another decade.

Stephen Kruiser is a professional comedian and writer who has also been a conservative political activist for over two decades. A co-founder of the first Los Angeles Tea Party, Kruiser often speaks to grassroots groups around America and has had the great honor of traveling around the world entertaining U.S. troops.

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Top Rated Comments   
You ought to suing your Union for the crappy retirement you got. Isn't the point of having a union is to have good benefits?

Too bad they spent all your dues money on political campaigns to elect wealthy Democrats into office, instead of shoring up your retirement with the money they got from you, because everybody knew that the projected inflated economic gains that were assumed would fund the Union Collective Bargaining Contract that funds your retirement were not real and that we would be upside down on what the fund would require to be self sustaining in the future.

You can thank the Democrats and the Unions for the pickle we and you are in. I didn't vote for any of them BTW.
41 weeks ago
41 weeks ago Link To Comment
Part of it is that even they realize that they cannot blame the GOP for much of anything anymore when the Dems have One Party Rule of California.
41 weeks ago
41 weeks ago Link To Comment
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All Comments   (4)
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Part of it is that even they realize that they cannot blame the GOP for much of anything anymore when the Dems have One Party Rule of California.
41 weeks ago
41 weeks ago Link To Comment
There have been other tiny signs of hope. Notably, the State's CalPERS system reduced the pension of the guy with the highest pension in the state by 80%. He's currently trying to sue his former employer (the city of Vernon, where he was the city manager) to get the pension reinstated, but it's unlikely he'll succeed...oh, I guess I forgot to tell you. His pension was slightly over $500k...they reduced it to about $105k or so. Vernon has very few people in it, all of them belonging to 2 families who run the place, so up till now no one was complaining about the pension's size.

The problem with the baby steps comment is that there's no guarantee this is going to happen quickly enough. There are a bunch of people pulling down $100k+ pensions (over 15,000 last I looked) and there are multiples of that looking to retire in the next 10 years or so. Some of their pensions dwarf those of the current retirees. If the state tries to modify the pensions downward for those who are already retired, or those who currently work, you've got to go in front of a judge who's looking forward to his own pension. You think he's going to be happy about someone else not getting all the pension benefits they're "entitled" to? He'll think he's next on the list...
41 weeks ago
41 weeks ago Link To Comment
Retired CA teacher here, livin' paycheck-to-paycheck. Hope I still can, after all this dust settles. After all, I cannot get any SS$ even though I damn well earned it BEFORE I became a teacher. I'm in 1 of 14 states that deems that "double-dipping". Not lookin' too good...
41 weeks ago
41 weeks ago Link To Comment
You ought to suing your Union for the crappy retirement you got. Isn't the point of having a union is to have good benefits?

Too bad they spent all your dues money on political campaigns to elect wealthy Democrats into office, instead of shoring up your retirement with the money they got from you, because everybody knew that the projected inflated economic gains that were assumed would fund the Union Collective Bargaining Contract that funds your retirement were not real and that we would be upside down on what the fund would require to be self sustaining in the future.

You can thank the Democrats and the Unions for the pickle we and you are in. I didn't vote for any of them BTW.
41 weeks ago
41 weeks ago Link To Comment
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