Bruce Blanning
Destroying something worthwhile, such as a pension system, is best achieved by misdirection, claiming that doing so is necessary to help solve a financial crisis or other problem. Calling it “reform” rather than destruction and distorting the facts or being untruthful are the other ingredients in sowing the poisonous seeds to weaken, then kill a healthy, worthwhile program that provides reasonable benefits to retired career public servants.
The California Public Employees’ Retirement System, established by law and protected by the vote of the people in a constitutional amendment, administers the retirement plan for state employees and hundreds of local agencies that voluntarily participate. More than $200 billion in investments fund the retirement benefits for current and former employees. The system is actuarially sound, free from those politicians who would like to steal the money to pay for their pet projects. They find that rather frustrating, particularly those who don’t like public servants to begin with.
Public employee pension benefits are protected by the state constitution. If you are hired by a public agency and are told that when you retire you will receive a certain benefit, then that commitment must be honored. There is no bait-and-switch allowed with pension benefits. The governor acknowledged this recently in his State of the State speech when he said, “For current employees, these pensions cannot be changed – either legally or morally. We cannot break the promises we already made. It is a done deal.” Two days later, he proposed to violate that done deal by asking the Legislature to double the employee payment into the pension plan, which the courts have ruled is just as unconstitutional as reducing the benefits. However, at least for a moment there, he recognized the obligation of the state as an employer to its employees.
If the politicians and public servant-bashers can’t raid the money in the pension fund and can’t cut pension benefits, then what can they do? Well, they can try to persuade the people to change the constitution, or at least slash pension benefits for future hires. How do you persuade the people when the facts aren’t on your side? You say things that aren’t true.
Gubernatorial candidates say that pension benefits are excessive and the cost to the taxpayer is too high. The governor’s representative, David Crane, says pension costs have risen by 2,000 percent, pensions threaten funding for other programs, the benefits were “a costly mistake with terrible consequences,” and it’s all the fault of the Legislature. All of that is nonsense, but they keep saying it, the media keep reporting it, and sooner or later, they hope, people will believe it.
What’s the real truth about CalPERS? The average benefit for a retired public servant in CalPERS is $2,100 per month. Of that $2,100, only $1 of every $8 is paid by the employer, which means the taxpayer. The rest is paid through employee contributions and earnings on the investments. That means for every retired public employee, the taxpayers provide less than $300 per month for their pension.
Changes to the retirement plan have been negotiated in the past. Future changes, if any, should be achieved in the same manner. As Senate President Pro Tem Darrell Steinberg has said, if the state wants to save money on pay and benefits for its employees, “that means working with the people on the front lines. Don’t go around them.” Retirement benefits, along with salary and other benefits, belong on the bargaining table to be developed as part of a package.