CalPERS: Pensions need help

Sacramento Bee ^ | 7/26/02 | Paul Schnitt and Loretta Kalb

[randita]

Amid the euphoria of a soaring Dow that built huge surpluses for CalPERS, labor unions successfully lobbied the Legislature, with the support of the CalPERS governing board, to enrich members' retirement benefits. Some of the gains were dramatic.

Under a law enacted last year, for example, a local government worker with 30 years' experience who retired at age 60 would receive a pension benefit equal to 90 percent of his highest salary. Previously, that same worker would have received only 60 percent of his highest salary.

No further comment needed.

[randita]

ping

[Ernest_at_the_Beach]

Thanks for the ping!

Under a law enacted last year, for example, a local government worker with 30 years' experience who retired at age 60 would receive a pension benefit equal to 90 percent of his highest salary.

90 % ???? I did 28 years for IBM, forced out before I could make 30 and only get about 40 % of the last 5 years average with some damn formula!

calgov2002:

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[NormsRevenge]

"It's been a good run, but we've known all along there would be years when investment returns aren't there to be able to pay the lion's share of employee benefits," said Pat Macht, spokeswoman for CalPERS.

A Good Run? Not for the taxpayers .. who now are gonna be asked for more.. somehow
DUMP DAVI$ & the Den of Socialists

GO SIMON

[BurbankKarl]

http://www.strs.ca.gov/AboutSTRS/Invport.htm

Funny that comment from the State Teacher's Pension...they are down $6 billion...or 6 percent. But I bet they don't let their member districts slide on good years...

[breakem]

and some law enforcement agencies and corrections in CA now give 90% at age 55 based upon 3.0% per year of service. 2.5% at age 50. All of these formulas were tweaked up during the last 5 years.

[1Old Pro]

Amid the euphoria of a soaring Dow that built huge surpluses for CalPERS, labor unions successfully lobbied the Legislature, with the support of the CalPERS governing board, to enrich members' retirement benefits. Some of the gains were dramatic.

So much for saving for a rainy day, just give it all to the unions NOW, and tax people more later.

[John Jorsett]

Looks like we need a state initiative that says benefit increases for public employees have to be submitted to the voters. Those types of measures seem to be the only chance for an effective check on government bloat these days.

[PhiKapMom]

Check this out!

http://www.freerepublic.com/focus/news/722892/posts

[dennisw]

I like this. A down stock market bashing those who feed at the public trough who were kings for a moment. They have to come down just like the peasants they lord over.

[Kay Soze]

Today's LA Times

IN VERY SMALL PART to comply with rules-

NEWS ANALYSIS

Nest Eggs Cushioned From Market's Drop

Retirement: Diversified investments have kept pensions from falling as far as key stock indexes.

By JAMES FLANIGAN Times Staff Writer Story in LA Times

"In addition, pension funds typically invest with a long-term horizon. At the California Public Employees' Retirement System, the nation's largest public pension plan, investments are made on a 10-year perspective in accordance with strict ratios for allocating assets among bonds, stocks and real estate.

CalPERS is shifting more of its funds into stocks as part of a normal process to take profits and move money out of investments that have performed well (bonds) into those that have lagged (stocks). During the height of the stock boom, it shifted money from stocks into bonds.

These days "we are buying equities," said Mark Anson, CalPERS' chief investment officer. "We are selling our gains in fixed-income securities and buying $200 million to $300 million in equities with every 50 point drop in the S&P 500," Anson said. That index has fallen almost 400 points in the last year.

CalPERS' mammoth investment portfolio has lost only about 5% in the last year, going from $156 billion to about $149 billion at present, because gains in bonds and real estate reduced the overall losses.

[razorback-bert]

So, the PRC state employees will have a 16% pay cut.

[Ernest_at_the_Beach]

Did you have a different article in mind ?

[PhiKapMom]

Actually I meant it to go in freep mail!

[Dog Gone]

Under a law enacted last year, for example, a local government worker with 30 years' experience who retired at age 60 would receive a pension benefit equal to 90 percent of his highest salary.

How on earth was that sustainable? At age 60, you have a life expectancy of over 20 more years, and it's been increasing every year.

As the Boomers retire, that will increase the burden. Unbelievable.

[monkeyshine]

It's no different than every other government in the state. California overspent using projections that could never have withstood time. So did most cities and counties. To make matters worse, they gave everyone a retirement raise!

Now the state wants more taxes, and so does my county.. they want to raise property taxes to pay for hospitals that help illegals who own no property and pay no taxes. Great freakin' system we got here in California.

[monkeyshine]

We need a Consitutional Amendmend to the state, that will roll back and cap state expenditures and taxation to about $60 Billion a year. Thereafter it can only rise by the rate of inflation, plus a mulitiple to account for population (If the population goes down, so does the spending).

To not have a Constitutional Amendment is to invite these disasters again in the future, assuming we can get out of this one with our pants on.

[tubebender]

"The value of CalPERS assets peaked at $178 billion in early 2000. But as the stock market faltered, CalPERS' assets fell below $145 billion. Annual returns on investment, which averaged well into double digits annually during the 1990s, turned negative the last two years. "

They lost 33 BILLION and they are not in jail yet ? If the private sector can be held accountable why not the buffoons managing this fund ?

[snopercod]

Following your link, and looking at "Alternative Investments", it seems that the STRS has been loaning money to the California General Fund to keep the state solvent.

Is Gray Davis Looting California Retirement Funds?

[John Jorsett]

We need a Consitutional Amendmend to the state, that will roll back and cap state expenditures and taxation to about $60 Billion a year. Thereafter it can only rise by the rate of inflation, plus a mulitiple to account for population (If the population goes down, so does the spending).

We had just such a proposition (the adjust for inflation/population part, anyway) in Proposition 4, which passed in 1979. Following is the summary (from California Ballot Propositions Database).

LIMITATION OF GOVERNMENT APPROPRIATIONS. INITIATIVE CONSTITUTIONAL AMENDMENT.

Establishes and defines annual appropriation limits on state and local governmental entities based on annual appropriations for prior fiscal year. Requires adjustments for changes in cost of living, population and other specified factors. Appropriation limits may be established or temporarily changed by electorate. Requires revenues received in excess of appropriations permitted by this measure to be returned by revision of tax rates or fee schedules within two fiscal years next following year excess created. With exceptions, provides for reimbursement of local governments for new programs or higher level of services mandated by state. Financial impact: Indeterminable. Financial impact of this measure will depend upon future actions of state and local governments with regard to appropriations that are not subject to the limitations of this measure.

Unfortunately, it hasn't acted as much of a brake on state spending. Here's what a Claremont Institute Report, California's Fiscal Condition (Google cache: the original seems to be gone from the Claremont site) said about Prop 4's limits:

A third element in the taxpayer's triad of defense was a constitutional provision of more recent origin. In 1979, voters approved Proposition 4, better known as the Gann Spending Limit, which placed a flexible restraint on the total amount of funds the government could spend without voter approval. The limit was hardly draconian (it expanded with population and inflation), and from 1979 to 1990 allowed state general fund spending to increase from $12.6 billion to $31.2 billion in current dollars.

In 1988 and 1990, Propositions 98 and 111 changed the formula for calculating Gann, sending the spending limit into the upper stratosphere of government finance, where it still orbits unobtrusively today. For example, Proposition 111, which the Legislature titled a "Transportation Improvement and Spending Limitation Act," increased the spending ceiling by $53.3 billion over a decade for purposes unrelated to transportation.