The Coming Impact of Pension Payments on California’s Cities, and How Reforms Could Happen

AUDIO: Part One – Employer contributions to pension systems for state/local workers are set to double in the next six years, best case. Ways agencies are trying to increase taxes and cut services to find the money – 10 minutes on 1440 AM KUHL Santa Barbara – Edward Ring on the Andy Caldwell Show.

AUDIO: Part Two – A discussion of how California’s pension crisis began, what potential reforms could make pensions financially sustainable, and the organizations that could successfully push these reforms – 10 minutes on 1440 AM KUHL Santa Barbara – Edward Ring on the Andy Caldwell Show.

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Stephen Douglas
February 14, 2018 2:07 pm

When Mr. Ring says the pension will go from 60% to 90%, (with 30 years service),that —only— applies to those who actually retire at age 50. (Which would require beginning career at age 20, very unusual.)

The average age of CHP retires is 53-54. Slightly higher for local police.
(Partly because the average age of trainees in the CHP Academy is mid-to-late twenties.)

The 2% formula he referred to increased to 2.7% at 55, both formulas had a 90% max. If that employee retired at age 55 with 30 years service, his pension would be 81%, not 60% Even under the previous formula, many officers retired with 90%, So SB400 gave them no pension increase at all, nada. And not retroactive.

To be sure, many officers did get pension increases and/or were able to retire earlier, but to imply that all officers got a “fifty percent pension increase, retroactively” is just not true. And note this increase was almost exclusively for safety workers, not miscellaneous.

BOPRN
April 27, 2018 1:22 am

Hi Ed!

It has been a few years since I took the time to pull your chain. The world has not caved in yet! What would you think of the following to fix the system, and bring ‘fairness’ to it?

1) Limit the maximum non-safety retirement to the California average household income
2) Limit the maximum safety (remember they don’t get SS) to the California average household income + $24,00 per year
3) Any amount that the member would qualify for about that, have a TSP (like the Fed) with an employer match of 5% for up to $40,000 contributed
4) Make all classifications, regardless of retirement type, contribute 50% to the CalPERS pot
5) Remove judges from their special plan, and put them in with the rest of CalPERS
6) Cut current retirees to the above mentioned limits in bullet points 1&2, with the following exception
6b) For each $10,000 increment above the California average household income, the retire loses 10%, with percentages going up another 10% on each $10,000 until a 50% point per 10k is hit. An example is as follows:
Retire 1: Has a 50k/year retirement, the average California income is $57k per household – this retiree sees no difference.
Retire 2: Has a 87k/year retirement. The first 57k is protected. The next 10k, the retiree loses $1000, the next 10k $2000, the next 10k $3000. This means the retiree has gone from a 87k/year retirement to a 81k/year retirement
5) Has a 157k/year retirement. First 57k is protected. 57K-67K Loss of 1k, 67-77 2k, 77-87 3k, 87-97 4k, 97-157 30k (5k per each 10k). This retiree has gone from 157k retirement to 117k.

This protects the basic needs of all individuals, while having a progressive loss of benefits. This would quickly correct the under-funding of CalPERS while not causing anybody undue financial hardship.

Curious as to your opinion.

Remember, you can’t say pension without saying….