CHCRS Responds to Little Hoover Commision Report

Friday, February 25, 2011

Sacramento—The Little Hoover Commission has truly missed the mark in its efforts to study potential reforms to California’s 85 public employee retirement systems. Rather than presenting a reasoned and constructive analysis, the Commission attempts to wipe away more than 50 years of legal and financial precedent by joining the chorus of doomsayers who seek to undermine retirement security for millions of Californians.

“For a supposedly non-partisan commission this report enters the policy discussion on the side of the Governor of Wisconsin, seeking to cut the benefits of teachers, firefighters and other public employees who are already working to find ways to ease the financial pressures on our governments,” said Dave Low, chairman of Californians for Health Care and Retirement Security.  “While there are real challenges facing our state and local governments the rhetoric of this report seems designed to inflame fear rather than to generate reasoned solutions.”

When average pension payments for public employees are in the range of $24,000 per year it is unconscionable to call for cuts and rollbacks of those payments.

Throughout the almost 100 page report there is barely an acknowledgement of the role the recent market crash has played in the challenges confronting state and local governments.

It is important to remember that retirement funds for public employees were fully funded in the 1990s and that in 2007 most California funds were very healthy.  The Wall Street banking fiasco pummeled the earnings of all Americans, wiping out savings and 401k accounts and causing pension funds to lose billions of dollars.


Rather than recognizing the sacrifices public employees have made in recent years or analyzing the impact of layoffs and furloughs and pay cuts on helping government budgets, the report instead implies that more job cuts are the solution.

At the state level alone, public employees have agreed to pay a greater share of their retirement costs, saving money in the current budget as well as reducing benefits for new employees. In more than 90 local jurisdictions across the state, the men and women who care for children, run recreation programs, staff libraries and keep our streets clean are doing their part of help balance local budgets and strengthen the retirement security system.

“Across California public employees are doing their part to help meet the pension challenges caused by the market collapse, “ Low said, “Public employees did not cause the economic crisis, but like all other Americans they have paid a dear price for the excesses and abuses of Wall Street.”


Rolling-back the pensions of all public employees is not the answer for a complicated system encompassing 85 different pension plans that have evolved to meet the unique needs of different communities and to provide retirement security for so many different kinds of workers.