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Headline: CalPERS’ Bad Faith Didn’t Stop in 1999
Publication: The San Diego Union-Tribune
Article Date: Sep 20, 2016

This editorial follows up a recent feature outlining the history of Senate Bill 400, which boosted state workers’ pensions substantially in 2000. The California Public Employees Retirement System (CalPERS) is roundly castigated by most budget analysts and media sources for selling the huge benefit increase to the Legislature by claiming it would be fully covered by positive investment returns in a bold and bullish stock market. Here the editorial board labels passage of SB400 a “public policy crime”, and goes on to cite actions by CalPERS in subsequent years that indicate the giant pension fund continues to act in bad faith where taxpayers are concerned.

Article Commentary by Chris Heiserman, RESDC Editorial Committee Chair
It’s pretty clear that the fiscal implications of the big bump in pension benefits in 2000 went largely unnoticed initially. Rosy predictions about investment returns led CalPERS and other retirement plans to underestimate or skip annual contributions to their funds. When the market tumbled and the ranks of retirees grew, dark financial clouds loomed on the longer term horizon. CalPERS should be criticized for its misleading public relations ploys (“average annual retiree benefit is just $31,500”); however, the Union-Tribune shouldn’t get a pass when it characterizes data and information from obviously biased anti-public pension sources as “accurate coverage of pension woes.” CalPERS deliberately averages all retiree pay to report a low number; the data source the U-T uses for comparison averages the combination of pay and other benefits for “full career” retirees (30+ years), thus producing the highest possible number.

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Headline: The Pension Gap
Publication: Los Angeles Times, CALmatters, & Capital Public Radio
Article Date: Sep 18, 2016

This article explains the history of Senate Bill 400 which significantly enhanced state public employee pension benefits in 2000. Even though he has a decidedly negative slant toward labor (“the kind of retirement security normally reserved for the wealthy”), the reporter does a pretty good job of tracking the issues and players involved over the ensuing years.

Article Commentary by Chris Heiserman, RESDC Editorial Committee Chair
The 1999 legislation enhancing retirement benefits for state workers is looked on by public pension critics as the original “sin” against taxpayers. In their view it lead to benefit increases throughout California local governments that are unfunded and unsustainable. The problem is instead of looking for ways to pay for those benefits already promised and working with labor groups to make pension plans more viable going forward, they want to scrap Defined Benefit retirements altogether in favor of 401(k) accounts that are the darlings of the private sector but provide woefully inadequate income streams to retirees.

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Headline: No more Pensioners’ bonus money – County runs out of funds for checks retirees received for nine years (print title)
Publication: The San Diego Union-Tribune
Article Date: Sep 2, 2016
Article Author: Lauryn Schroeder

Article Commentary by Chris Heiserman, RESDC Editorial Committee Chair
This Watchdog Report is wrong on the facts in several instances:
1. There were no extra checks – the benefit was included in retirees’ monthly disbursement.
2. Characterizing this benefit as a “bonus” is misleading – the fund was created when Tier A employees lost retiree health care benefits afforded longer term workers.
3. There are 8,600 Tier A retirees but not all of them were eligible for the benefit – only those with more than 10 years County service.
4. Many Tier A employees were hired before 2002 and opted into the Tier A category for higher pension benefits.
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