Cities: repeal landmark pension legislation

Thursday, November 10, 2011

Calpensions
By Ed Mendel

CARSON-A League of California Cities representative urged a legislative committee on Nov. 1st, to repeal two decade-old bills allowing local governments to negotiate higher pensions, saying the benefits are “too rich” and “unsustainable.”

The legislation backed by CalPERS created a range of more generous formulas said to have ratcheted up pensions during labor negotiations as employer “chased the richest contract” to remain competitive. 

“We think it’s important to repeal SB-100 and AB 616 because we think they have generated pensions that are unsustainable and very difficult to explain to the larger public that we serve,” Rod Gould, Santa Monica city manager, told the committee yesterday.

He said the cities would like to see CalPERS and other large retirement systems “offering additional formula choices that maybe aren’t quite as lucrative as those that are currently available but provide more choices to be bargained locally.”

The two-house committee held the first of three hearing on pension reform planned before the Legislature reconvenes in January. A plan is expected to emerge from bills pending in the Legislature and Governor Brown"s 12 point Pension Reform plan. 

California group moves to put pension overhaul on 2012 ballot

Chronicling civil-service life for California state workers
THE SACRAMENTO BEE

November 2, 2011

California group moves to put pension overhaul on 2012 ballot

California’s current and future state and local employees would pay more for their pensions under two ballot initiative proposals submitted to the state attorney general today with the intent of putting one of them to a statewide vote next year.

“Seventy percent of voters think it’s time,” said Dan Pellissier, president of California Pension Reform, referring to public opinion polls on public pensions.
His group, which includes a former chairman of the California Republican Party, Duf Sundheim, former GOP Assemblyman Roger Niello, Marcia Fritz, president of the Citrus Heights-based president of the California Foundation for Fiscal Responsibility, and Schwarzenegger finance director Mike Genest, is filing the measures for an official ballot title and summary today, less than a week after Democratic Gov. Jerry Brown rolled out a pension October 27th.

Once the measures are labeled, summarized and packaged with fiscal impact analyses from the state’s Department of Finance and the Legislative Analyst’s Office, the pension reform group will conduct polling, select one proposal and launch a signature collection campaign to get it on the November 2012 ballot.

“We admire the governor’s tenacity, but we have little faith that the Legislature will adopt anything of substance,” Pellissier said in an interview with The Bee. “And we fill in some of the gaps” in the governor’s proposal.

The largest, say critics of Brown’s plan, is that the governor’s plan only makes current costs cheaper and skips the more difficult task of paying down down the unfunded liabilities that pension systems have built up in the last decade. Estimate on how the spread between the funds’ assets and their obligations vary widely. The worst-case scenarios peg the obligations at $500 billion for California’s three largest public pension funds.

California Pension Reform’s first ballot proposal, dubbed the “Government Employee Pension Reform Act of 2012, Option NO.1,” prohibits pension funds from incurring new debts or unfunded liabilities. “Defined contribution plans would be the most likely option” for new workers, according to the proposal’s language, “though defined benefits and annuities underwritten by third parties would be allowed.”

The plan caps employer contributions for new employees’ retirement accounts at 6 percent of base pay for non-safety workers and 9 percent for safety employees such as police and firefighters. Employees would have to make up the difference.

Current employees and employers would split contributions equally under Option NO.1 unless the value of a fund’s assets fell below 80 percent of its obligations. Then the 6 percent and 9 percent employer contribution caps would kick in for everyone until the fund’s asset values regained the 80 percent funding threshold. (This provision is also part of the second ballot initiative proposal.)

New employees who don’t participate in Social Security—public safety workers and teachers—would receive a guaranteed “replacement benefit” equal to the Social Security payment they would otherwise earn. Most would have to wait until 67 to receive the full benefit, just like Social Security. Full-career public safety workers would receive their full benefit at age 60, up from the current age of 50 OR 55.

Brown’s plan doesn’t nail down the full retirement age for police, firefighters and other public safety workers. Brown’s Labor Secretary, Marty Morganstern, said during a conference call with reporters last week that the administration hadn’t settled on an age.

Option NO.1 from the pension reform group also mandates that current and future employees’ pensions be calculated on a three-year average of an individual’s highest base wages. Brown’s plan includes that same anti-spiking provision, but restricts it to new hires.

Public employee unions and many legal experts believe that unilaterally downgrading any detail of pensions promised to current employees violates state and federal laws that protect property rights and contracts.

Pellissier said there’s wiggle room.

“We’ve spent a tremendous amount of money on legal fees. There’s a good legal case for changing benefits that are earned in the future,” Pellissier said. “We’re not going to spend a minute arguing about it. We’ll let the court decide. Tell it to the judge.”

Option NO.1 includes other provisions in Brown’s plan or versions of them, including a ban on retroactive benefit increases and a provision that prevents felons from collecting full government pensions if their crimes were connected with their public duties.

Like Brown’s plan, both proposals call for government employers and their employees to equally share the cost of retirement benefits. But the reform group’s plan puts a bigger burden on employees if their fund’s assets equal less than 80 percent of its obligations. If that happens, the government’s cost would be capped at 6 percent of an employee’s base pay while the worker’s contributions would increase to make up the difference until the fund recovers.

Unlike Brown’s proposal, neither of the reform group’s plans address “double dipping” that allows retirees to return to work and collect both a pension and a government paycheck. Nor do today’s proposals ban “pension holidays” that allow government employers to skip pension payments when their pension funds have more in assets than obligations.

Brown also wants to lengthen how long employees have to work to qualify for the state’s retiree health benefit subsidy. California Pension Reform’s proposals stick to pension policies.

“Government Employee Pension Reform Act of 2012, Option NO.2” is “a lot like the governor’s proposal,” Pellissier said, particularly its mandatory “hybrid” pension for new hires.

Hybrids combine a smaller defined benefit with a professionally-managed 401(k)-style defined contribution and Social Security. Option NO.2 provides a larger defined benefit component for employees who don’t participate in Social Security.

The federal government adopted a hybrid retirement plan for its employees in 1987. The policy benefits employers by cutting their contribution costs and making the expense somewhat more predictable. Employees bear the losses when defined contribution investments fall short.

The Option NO.2 hybrid intends to provide new hires with 75 percent of their working income after a full career. For safety workers, that would translate into 30 years ending at age 58, Pellissier said.

A full career for all other employees hired in the future would be 35 years, ending at age 67, the same as Social Security and Brown’s hybrid plan. Workers could retire five years earlier with a lesser benefit.

Ohio Voters Protect Worker Rights

Tuesday, November 08, 2011

OHIO - Ohioans overwhelmingly voted to repeal Senate Bill 5 - Governor John Kasich’s attack on middle class jobs that was designed to destroy collective bargaining rights in Ohio. “From the very beginning of the jobs crisis, anti-worker politicians like Governor Kasich have used our poor economy to push a cynical political agenda that favors the richest 1 percent at the expense of the 99%” said AFL-CIO President Richard Trumka. 

Shasta County General Unit Meeting October 2011

Friday, October 21, 2011

A little over seventy (70) members attended Octobers meeting.Our Union Relations Representative, Christine Perry, started off the meeting with some thoughts on a campaign to present all of the Shasta County employees in a positive light. This would consist of Public Service Announcements (PSA’s) and purchased spots on local media stations. We are looking for a group of our Union members to form a committee to spearhead this endeavor. Christine is a communication and media specialist with many years of experience in this field.

County Administrative Officer Larry Lees then presented an overall picture on the economic health of Shasta County. Mr. Lees spoke on the following topics:
Discretionary revenue continues to decrease. Last year it was down 5% and it is down 3% this year.
“Trigger Cuts” in the state budget. Certain cuts will automatically be made if revenues do not meet there projections. These projections were down over $300 million in one month alone.
There continues to be discussions in cutting or eliminating funding to programs like CalWorks and our local schools. Schools could be closed from 10-12 days more each year with a cut in funding equal to this closure.
The State does not want any retro-contracts. This would include all costs for general assistance including employee wages.
The State prisoner release program has begun. The State has sent in about $100,000 in seed money to start the program.
Mr. Lees personally looks at all jobs hired in his “Controlled Hiring Process”.
Public entity’s across the state have averaged about 10% in layoffs. Shasta County layoffs totaled approximately 2.5%, and all but two employees have been returned back to work.
Mr. Lees is opposed to furloughs as it is only a temporary fix except in small departments of about ten employees or fewer.
Mr. Lees believes that numerous jobs have been saved in Shasta County because of the sacrifices and support of the County workforce.
Of the 58 California Counties Shasta County ranks around 29 or 30. California has the 8th largest economy in the world.
Shasta County was forced to borrow approximately $2 million from reserves for law enforcement.
The Shasta County current reserve is at 2-3% of the budget and should be 5-10%.
The good news is that Shasta County is financially stable, unlike some of our neighboring counties.
The CAO is afraid of burning out employees and he is looking at ways to recognize employees without a cost.
Discussion on the current health insurance and administrations desire to go to a two tiered plan. The healthcare liability for our county is 100-140 million annually.
The CAO has created a tri-fold document letting the public know what the employees do for the citizens of our county.

The employees responded that they are all stressed out to the maximum and no one can afford any more cuts to salary or benefits.
There was discussion on the inequity of salaries and benefits between line staff and management.
The employees spoke to excessive workloads because of eliminated or vacant positions.
Currently we have employees who are eligible and receiving some of the same services we manage for the rest of the community.
It is difficult to retain employees with lowered salaries and benefits.

There were several questions asked of Mr. Lees that he wrote down and stated that he would have to research. Mr. Lees promised to get the answers back to me so I can publish them on this website.

The employees thanked Mr. Lees for his time and his candid comments about the County’s economy.

Our next meeting will be held on November 29, 2011 (Tuesday) starting at 5:30PM at 1800 Park Marina Drive. 

RED RIBBON WEEK, October 23rd thru 31st. 2011

Monday, October 17, 2011

RED RIBBON WEEK, October 23rd is National “RED RIBBON WEEK”.  Many businesses, schools and individuals will be wearing “red ribbons”.  This event serves as a vehicle for communities and individuals to remind everyone of the need to work together to make youth aware of the dangers of drug and alcohol abuse. 

LIUNA Backs Occupy Wall Street Movement

Friday, October 14, 2011

LIUNA 09-30-11:  Statement of Terry O’Sullivan, General President of LIUNA, On Occupy Wall Street.

Washington, D.C. (September 30, 2011) - The most valuable asset in America isn’t Wall Street, it is working people.

Yet in America today, millions of working people are jobless and are losing their homes, their hopes and their dreams.  Meanwhile, corporations are making record profits and the most profitable among them pay no taxes, shifting more wealth from the working and middle class to the rich.  This ill-gotten wealth is being used to finance an unprecedented assault on working people and unions in states across the country and in Washington, D.C.

Wall Street caused our economic crisis, and yet corporations are attempting to force working people to pay for it.

The only way to turn back the assault is to strengthen unions and build movements, such as Occupy Wall Street.

The workers who build America-the half-million men and women of LIUNA-are united behind the fight against corporate tyranny and for economic prosperity for all and stands with the Occupy Wall Street movement in New York City and across the United States.

The half-million members of LIUNA-the Laborers’ International Union of North America - are on the forefront of the construction industry, a powerhouse of workers who are pround to build America.