A proposed pension reform initiative, the Public Employees Benefits Reform Act (PEBRA), should die an early death and never see the ballot box. PEBRA gives state workers pension guarantees superior to private sector workers. It does nothing to fix the current pension mess. PEBRA does little to reform the generous “3 at 50” retirement benefit that is bankrupting the state. It leaves the door open for taxpayers to pay state worker health and pensions costs in full. PEBRA isn’t the reform California needs – eliminating pension guarantees completely.
PEBRA gives state workers pension guarantees superior to private sector workers. PEBRA’s sponsor, Californians for Fiscal Responsibility (CFFR), base their proposal on “10 Commandments”, including:
* Pension benefits must be fair and adequate
* Pension benefits must be guaranteed
Yet, private sector workers get no pension guarantees. State workers get pensions (“defined benefits”), while private sector workers at best get 401(k) plans with uncertain benefits. It hardly seems “fair” to guarantee state workers “adequate” pensions superior to the private sector workers who pay for them. Yet, PEBRA amends the California Constitution to give state workers just such protections.
PEBRA does nothing to fix the current pension mess. California taxpayers are on the hook to pay for the $50 billion in losses that CALPERS took in the past fiscal year. This proposal does nothing to fix that.
PEBRA does little to reform the generous “3 at 50” retirement benefit that is bankrupting the state. The 3 at 50 benefit makes retirees eligible to retire at age 50, where they can collect retirement pay equal to 3 percent of their best year’s salary for each year worked (up to 90% percent of that salary). True, PEBRA raises retirement ages – to 55 for peace officers/fire fighters, 60 for public safety, “full retirement age” for others. True, it trades “best year’s salary” for highest annual average base wage over 5 consecutive years. However, PEBRA’s percentage limits are a sham, since the proposed limits (2.2% for peace officers/firefighters, 1.8% for public safety, 1.5% for others) are easily raised to 3% based on inflation. And, this applies to new workers only.
PEBRA leaves the door open for taxpayers to pay state worker health and pensions costs in full. It gives state agencies a Constitutional right to adjust the amount of employee contributions for these costs in any manner the agency finds appropriate. This would tie the Legislature’s hands against the very abuses that have created our fiscal crisis. This is the opposite of taxpayer protection.
The California state worker retirement system needs reform. But, this sham does more harm than good. Real reform means eliminating pension guarantees completely so that state workers are treated like the private sector workers who pay for them.
Proposals to “overhaul” public pensions such as the one by John Moorlach to seek an initiative or legislation to enact a State law to take away local control by cities and other public agencies in such matters are bound to produce a counter proposal or two. Call it a backlash, but this reads like the opening salvo. All who run to Sacramento to seek new laws to “fix” problems should be careful what they ask for, especially when they seek to usurp local control. Dumb.
“PEBRA gives state workers pension guarantees superior to private sector workers.”
Tell me if I’m wrong but its my understanding that those of us who work for the state are required NOT to have any current or prior convictions or felonies, correct?? Like we cannot have a DUI on our records, or all the above, in order to work for the state, correct?? Pretty much that means we have to be ‘good’ citizens who follow laws and are responsible. In the private sector I don’t think they are held to such standards I believe. I know a few old friends of mine who have had DUI’s on their records and a family member of mine who works in the private sector. My whole point is why would you guarantee anything in the private sector when standards are fluctuating daily and at the state level that is not the case. Why can’t us state workers be guaranteed something after working for many years and being good citizens??
Also the state is only in the trouble its in because of the current economy (which has only been around for about a year and a half). Its interesting how people act like our states going to fall apart finacially when we have only been in a recession for only a little over a year and its cause had nothing to do with pensions, state wages, etc. But the fall of our current economy is due in part of the private sector. Everyone wants everything to go private but our country has been falling apart recently because of the private sectors greed. This should show you that we need a healthy balance of a private and public economy (what ta-gen I put myself in).
State workers should not be treated better than the private sector workers who pay for them. It is manifestly unfair to force private sector workers to pay for state worker pension guarantees when private sector workers get no such guarantees. Who’s being greedy, here?
The state’s crisis is the result of unsustainable spending. State spending increased 50% in the years 2003-2008.
Healthy balance of public and private? Every public sector dollar is forcibly taken from the private sector (individuals and businesses).
Rogue, I think you missed one point: private sector employees have Social Security guarantees but government employees do not. They shouldn’t be treated differently, but right now that’s just the way it is.
I agree that any kind of defined benefit plan, whether pension or social security, is unfair to the taxpayer.
Besides the criminal record difference, public sector employees (and their freinds and neighbors) get to see their personal salaries and benfits printed in the paper, their names printed when a mistake of some kind is made, receive death threats in some jobs (not just public safety), have to annually disclose their income and investments for all to see, deal with some of society’s ugliest problems (from hazardous waste to child abuse, elder abuse, domestic violence, mentally ill, etc.) and, currently at least, be viewed as greedy or worse. Don’t know if these differences warrant better pay and benefits, but the point is there are significant differences on a personal basis between public sector jobs and most private sector jobs. As to Social Securty, thre are a few public agencies that have both a defined benefit program and enroll also in Social Security. I have not figured out why they do that, as it sure drives up payroll costs, but a few do (I am not aware of any public agencies in OC that do both, but also cannot say there are none here either).
it is unsustainable. period
In short …………… for “similarly situated” (meaning the SAME pay, the SAME years of service, and the SAME retirement age) public & private sector workers, the “VALUE” at retirement of pensions & benefits should not differ materially.
Currently, the “value” of non-safety worker Public Sector retirement packages are 2-4 times that of Private Sector workers, with that multiple rising to 4-6 times for Policemen & firemen.
This is patently UNFAIR to TAXPAYERS !
I think the reason there are so many people working for the state is because private business pay NOTHING! Its all about the top 2% or 3 % making above and beyond living wages. This is an extreme example but take for instance Walmart and Target. Would you be able to work for them and “make a living”? Probably, but you’d be living with 3 families under one house to get by. The fact I think also is that MOST people think these pensions are FAIR because most people can’t make it by working for the greedy private sector.
My summary pretty much is this: The private sector is all about profits and not about jobs, the Public Sector is about hiring others who are good law abiding citizens and government is balancing this by taxing the greedy private sector.
Either way, this is economy is due in part because of the private sectors greed. Banks lent money to ANYONE! There was no oversight because that’s what conservatives wanted, a free market and look what happened. Lesson learned? No because they took our tax money and put it back into their pockets. If small business had a chance to do so they probably would do the same thing, but they’re small so they only do it on a small level (by hiring illegals).