Posted on 12/30/2009 10:17:46 AM PST by NormsRevenge
Something has gone horribly wrong with the California Public Employees’ Retirement System. The 1.6 million local and state government workers and retirees who rely on the pension giant should be deeply worried. State taxpayers who are going to have to bail out CalPERS should be infuriated. In area after area, CalPERS has been a disaster.
•Public policy. The 1999 state law that led to an orgy of retroactive pension spiking by government agencies only passed because of Cal-PERS’ insane assurance that a perpetually rising stock market would always cover the cost of sharply increasing benefits. CalPERS is thus directly culpable for the financial ruin of dozens of cities, counties and special districts that are saddled with massive unfunded liabilities.
But the agency’s lavishly paid upper management won’t even acknowledge its enormous mistake. Instead of doing the responsible thing – urging the passage of new laws limiting benefits for new hires and reducing benefit costs to more affordable levels – CalPERS sees nothing wrong with its status quo assumption that the state’s general fund should have to provide ever-greater funding to the agency to pay for its actuarial fantasies.
•Competence. CalPERS’ claim that its investments are based solely on their worthiness was demolished by published reports documenting how private equity firms paid Alfred Villalobos, a former CalPERS trustee, more than $70 million for his success in persuading CalPERS to invest in them. Among the firms paying Villalobos: Apollo Global Management. CalPERS’ $600 million investment in Apollo was valued at $180 million earlier this month.
•Integrity. The arrogance that typified CalPERS’ upper ranks when the agency’s investments were doing well has morphed into denial and a take-no-prisoners bunker mentality reflected in top officials’ habit of lashing out at those who point out CalPERS’ woes.
A CalPERS computer was used this summer to post anonymous online comments mocking Marcia Fritz, the leader of a group advocating pension reform. A February story by a Bloomberg reporter on CalPERS’ vast investment losses and dubious long-term predictions on investment returns was ripped by the agency’s assistant executive officer, Patricia Macht, as propaganda from “anti-pension ideologues.”
Meanwhile, the agency has launched a Web site – www.calpersresponds.com – that presents a self-serving, distorted view of its record. This led to an unusual rebuke from the editors of Pensions & Investments magazine: “If this were the financial disclosure Web site of a corporation, it certainly wouldn’t pass any minimum acceptable disclosure standard at the Securities and Exchange Commission. This is ironic in that CalPERS would certainly take issue with any corporation in its portfolio that maintained a similar one-sided Web site focusing on its financial or corporate governance performance.”
Plainly, CalPERS has gone haywire – and something needs to be done about it. We think it’s time for the CalPERS board to purge everyone responsible for the poor decisions of recent years. The purge should start with CEO Anne Stausboll, who previously was the agency’s chief investment officer, and extend to those responsible for its hostility to reform and its belligerent approach to critics.
Who should be put in charge? Perhaps chief actuary Ron Seeling. He frankly admits that present benefit levels are “unsustainable.” That his candor about an obvious truth seems so remarkable is one more illustration of the debacle that is CalPERS.
Ironic, eh?
The Left and their minions in the unions push “Sustainable Growth” yet do everything to torpedo and gut the economy as fast as they can get away with it.
Abolish all TAXPAYER FUNDED retirement and health benefits, that’s why we have Social Security and Medicare.
Should one generation be responsible for the DEBTS of another generation?? The answer is NO, and Thomas Jefferson said it best. The Land belongs to the Living. You will find it here on this site if you look.
Fixed it:
Something has gone horribly wrong with the California Public Employees’ Retirement System.
The alliance of public sector unions, coastal social liberals, and the vast underclass is so well entrenched in CA I have given up hope.
Oh great. I file for SS and they do not give a COL increase for the first time ever, my bank fails a week before Christmas and now my CalPERS pension.....
“The taxpayers” do not pay for my pension; I paid into it while I was working.
New York is walking down this same path - except they expect only PROPERTY OWNERS to fund the pensions. (at least that is my understanding as I’ve been warned that our property taxes will go up by 35% this next year.)
The only way CA can survive is by going bankrupt and defaulting on these obligations. Even if Terminator gets his bailout, it’ll all happen again a few months down the road. CA needs to default, and that will cause a shakeout of these union crooks.
You are mistaken in your reference to the purpose of Social Security. When the program was established, it was done so to keep poor old people from starving to death during the Depression. It was NEVER intended (even in modern times) to be a retirement program.
Retirement counselors today often speak of the three-legged stool: 1) private or public retirement income, 2) personal savings, and 3) Social Security. These constitute the basis for retirement.
You can look it up.
Plainly, CalPERS has gone haywire – and something needs to be done about it.
We think it’s time for the CalPERS board to purge everyone responsible for the poor decisions of recent years. The purge should start with CEO Anne Stausboll, who previously was the agency’s chief investment officer, and extend to those responsible for its hostility to reform and its belligerent approach to critics.
Who should be put in charge? Perhaps chief actuary Ron Seeling. He frankly admits that present benefit levels are “unsustainable.” That his candor about an obvious truth seems so remarkable is one more illustration of the debacle that is CalPERS.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.