In an unusual display of honesty CalPERS Actuary Says "Pension Costs Unsustainable"



The CalPERS chief actuary says pension costs are "unsustainable," and the giant public employee pension system plans to meet with stakeholders to discuss the issue.



"I don't want to sugarcoat anything," Ron Seeling, the CalPERS chief actuary said as he neared the end of his comments. "We are facing decades without significant turnarounds in assets, decades of -- what I, my personal words, nobody else's -- unsustainable pension costs of between 25 percent of pay for a miscellaneous plan and 40 to 50 percent of pay for a safety plan (police and firefighters) ... unsustainable pension costs. We've got to find some other solutions."



Dwight Stenbakken of the League of California Cities told the seminar that pension benefits are "just unsustainable" in their current form and difficult to defend politically.



"I think it's incumbent upon labor and management to get together and solve this problem before it gets on the ballot," he said.



"I actually think it is sustainable," said Terry Brennand of the Service Employees International Union. He said the basic problem is investment losses, not high benefit levels.



"What is sustainable?" said Lou Paulson of the California Professional Firefighters. He said proposals to extend the retirement age for firefighters from 50 to 55 would result in more injuries with advancing age, driving up workers' compensation costs.

Sustainability In Eyes Of Beholder

Politically Unfeasible Solutions

Long Beach Pension Costs Unsustainable

It is no secret the current pension plan has taxed Long Beach's budget. Now three council members are looking for solutions that could include giving public employees a choice between pension plans.



"The current pension costs are unsustainable long term and changes need to be made," said 3rd District Councilman Gary DeLong. "There needs to be a significant amount of discussion before deciding what those adjustments should be. This is the beginning of that process."



First District Councilman Robert Garcia, 2nd District Councilwoman Suja Lowenthal and DeLong are presenting the possibility of allowing public employees to choose between the current pension plan or a new hybrid plan.



The council will consider recommending that the city manager work with employee unions to study the pension option and report back to the council within 30 days.



The second option to the current "defined benefit" pension system would be a hybrid retirement plan, which is part pension and part 401(k). Employees could decide how much to contribute to their defined plan while paying and collecting less for pensions.

Growth In State Workers Simply Indefensible

What's wrong with this picture? Jobs are disappearing by the millions across the United States, and California is particularly hard-hit, with unemployment reaching a record 11.6 percent. Yet even as state revenue plunges, The Sacramento Bee reported that the state government has continued to expand during the deep recession, adding 4,000 new jobs since July 2008.



Even as Gov. Arnold Schwarzenegger laid claim to being the biggest tightwad of any recent state executive. Even as lawmakers of both parties announced we were in a new era of fiscal sobriety.



Instead of more state jobs, California needs far fewer. Since 1997, the number of full-time state government employees has gone from 284,000 to about 340,000. If the productivity revolution that's transformed the private sector finally manifested itself in government, there is simply no reason the state couldn't still function with its 1997 levels of staffing. Businesses handle procurement, record-keeping, claims and payroll processing, inventory management and housing with fewer employees than ever. Why can't government follow suit with its identical tasks?



There is no good reason why, only a political reason: the power of public employee unions.



And now here's the sad kicker to this story: Schwarzenegger's spokesman said he's “proud of where we are on hiring.”



The governor needs reminding that pride goeth before a fall, or maybe in this case before a collapse. If the state is ever going to live within its means — with an honest, gimmick-free budget — it has to first stop growing.

Eliminate Unnecessary Service and Privatize the Rest

PATCO Revisited



The best thing for San Francisco commuters is if every one of the union workers never works another day for BART in a Ronald Reagan vs. PATCO type of decision.



More government unions need to be dissolved, 100% of them to be precise. Amalgamated Transit Union Local 1555 is a good place to start.