Posted on 02/17/2006 12:04:41 PM PST by NormsRevenge
SACRAMENTO (AP) - The board of the California Public Employees Retirement System has voted to oppose a constitutional amendment that would institute a less generous pension system for government employees hired on or after July 1, 2007.
The measure by Assemblyman Keith Richman, R-Chatsworth, would create a new defined benefit plan for those workers. It also would allow them to enroll in a voluntary, 401(k)-style defined-contribution plan.
The vote was 10-0 with two representatives of Gov. Arnold Schwarzenegger abstaining. A 13th board member was absent.
"This bill comes at the wrong time," said state Treasurer Phil Angelides, a member of the CalPERS board and a Democratic candidate for governor. "This constant attack ... on pension security for the most valuable public servants needs to stop."
Richman criticized the CalPERS decision, saying it was premature and politically motivated. He noted that the California State Teachers Retirement System had postponed a decision on the amendment until it received an updated analysis of the measure.
"It is difficult for me to understand how they can vote on a proposal without an analysis of the adequacy of the benefit and the actuarial cost of the proposal," he said.
CalPERS officials said they couldn't determine the exact impact of the amendment because details of its defined benefit plan had not been spelled out. But they predicted it would have a "substantial financial impact" on retirees.
Richman's proposal would apply to all government workers, including those employed by city, county and state agencies, as well as school districts, community colleges and universities. It is awaiting a hearing in the Assembly Public Employees, Retirement and Social Security Committee.
I say don't even offer a defined benefit plan. Take the "risk" away from taxpayers completely by offering only 401k's.
"This constant attack ... on pension security for the most valuable public servants needs to stop."
You might be right, Angelides... they are NEW hires, which seem to much more valuable then the ones sitting back just waiting for their gravy train penaions to kick in.
I find it difficult to believe that California public employees don't already have a 457 plan. Can anyone confirm or dispell that?
The fact that the authors of this article couldn't even do that little digging leads me to believe that they are writing about something they know little about. My advice is to ignore this article. It has a premise that is fatally flawed.
I'm a California State Employee. O.K. stop laughing.
I've been with the state for 27 years. There are two ways one can do it. The first retirement tier group has approximately 5% of their gross taken from their pay monthly which is matched by the retirement system. You can achieve 90% after 35 or 40 years of employment.
The second tier takes nothing from your pay and you receive only the state funds. You top out at 40% after 35-or 40 years.
The interesting issue is that you can defer comp a portion of your salary to a plan of your choice. You get the tax savings and most do better than what PERS pays.
I chose the second tier. My return on my deferred withholdings greatly outpaces PERS.
This is nothing more than the union maintaining the powerful PERS agency. They have the best locations, buildings, perks, and vast levels of management at management salary. They also have a ton of money to spend on legislators to buy their votes. And buy their votes they do.
In California, the unions own, and I mean own the liberals in our so-called legislature. Breaking up PERS would weaken the union and liberals in the legislature as the cash cow would be removed. Not only PERS, but the teachers union, the employees union, and all the other unions have their strings firmly attached to the liberal legislators.
California has a very socialistic legislature. They have tried to pass bills that, for example, would place a 2 month waiting period before a state worker could verify a welfare applicants information. The checks would have to roll for 2 months before a background check could even initiated. A great way of getting money to those in our society who would vote democrat everytime - welfare recipients. That's California.
They also have a 403-B plan.
My only problem with this plan is that they only want to offer it to new employees. As a school district employee, I have over $6000/yr taken away and put into CalPERS. I would like to have the freedom to invest that money in the way that I choose, not be stuck depending upon the goodwill of the state for my future retirement. While the defined benefit program looks nice, I think it will be unsustainable, just like Social Security, meaning that I could easily lose my "investment" just when I am ready to retire. (It really can't be considered an investment, since I have no choice in whether or not to contribute, and I have no guarantee of a return.)
"As a school district employee, I have over $6000/yr taken away and put into CalPERS. I would like to have the freedom to invest that money in the way that I choose, not be stuck depending upon the goodwill of the state for my future retirement."
Simple, Just have your union demand that the retirement system be disolved - then you can invest any amount of your money any way you choose.
I am not in a union - I am management. I still have to contribute to CalPERS.
Since your contribution is figured in as how the benefits are paid for, just what percentage of them would you be willing to sign away in exchange for not paying into it ?
You may be on to something here ...
What annoys me as much as anything is how much power CALPERS exerts over the rest of the country as well, since they are major stockholders in bunch of large corporations. It would be different if their influence were restricted to California.
As a school district employee, why are you a member of Calpers instead of Calsters? I suppose it has something to do with the fact that you're an administrator and not a teacher. I just know that administrators and teachers alike are members of TRS in Texas.
One major difference between Calpers and Social Security is that SS is a pay-as-you-go system. Calpers is not. Calpers has well over $200 billion in assets. That can pay quite a few benefits.
I am a classified employee, not a certificated employee (teacher or administrator). Specifically, I am the desktop support and helpdesk manager.
True, but I get really worried when CalPERS starting focusing on tellling business how they should be run, rather than just focusing on making sound investments.
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