Dan Borenstein, a columnist for the Contra Costa Times, said pensions for California’s public employees may be a form of “theft.” Speaking, on Thursday, June 21, to a large audience at the Orinda Public Library’s auditorium, Borenstein said that the pensions of public employees are leaving a large debt to future generations.
Using a detailed slide presentation, Borenstein said that many public-employee pensions are based on a formula giving a public employee three percent of his or her top salary multiplied by the number of years of service.
For example, if a public employee received a top salary of $200,000 and worked for 30 years, the employee would receive a pension of $180,000 per year.
However, Borenstein said that some public-pension plans could provide even more money because of special factors. Some pension plans, he said, pay for an employee’s expenses for health care.
Borenstein said a public employee’s top salary can be increased by adding extra compensation for unused sick leave and unused vacation. This practice is called pension spiking.
Borenstein said that the California Public Employees Retirement System (CALPERS), can produce, based on 2008-09 data, a pension of $67,000 per year after 30 years of service. Yet, in certain cases, Borenstein said, pensions could go as high as $82,000.
Borenstein said that some public employees get extra money from the Social Security system.
Borenstein noted that CALPERS invests funds collected for future pension payments. CALPERS, he said, guarantees an investment return of 7.5 percent. (Until a few months ago, the guaranteed rate of return was 7.75 percent.)
Over the last 10 years, according to Borenstein, investments, on average, have returned 5.5 percent.
Borenstein said that if CALPERS does not achieve its current 7.5 percent rate of return, California’s taxpayers have to make up the difference.
Borenstein said that some government pension systems do not have enough money to pay promised benefits.
Bill Gram-Reefer is Editor & Publisher of Halfway To Concord, founded in 2004. Halfway To Concord is the leading online source for community-driven political news, events, and opinion for Contra Costa County and the San Francisco East Bay.
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The pension problem is an important issue this year. People are finally understanding that our past and current elected leaders have made promises that we cannot afford to keep. This is not fair to the taxpayers and this is not fair to employees who were promised these benefits.
Gov. Brown has presented the legislature a plan to bring about pension reform in the state of California. It is the republican party who introduced Gov. Brown’s plan but the democrat controlled house and senate are refusing to bring the constitutional amendment up for a vote. This week is the deadline by which the legislature can put a constitutional amendment on the ballot so that the voters can vote on pension reform like they did in San Jose and San Diego.
We need to elect leaders this year who will be willing to tackle pension reform so that voters can make the changes necessary to help keep California the greatest state to live in.
Candace Anderson was in front of the Channel 7 News Camera when I arrived. Candace was sworn in as Supervisor today.
I congratulated her.
The meeting was incredibly boring. Lots of fire fighters & pro tax old people. Chief Louder was the most boring.
Kris Hunt was short & to the point.
I had fun joking with Jim Bickert, the well dressed, Labor Relations Representative, outside the door.
Is bankruptcy an option? I just read Lisa V’s story in the obviously corrupt CC Times, about Chief Louder wanting more from the taxpayers. His propaganda will be @ 1:30 today in the BOS chambers.
I will be there taking notes of other peoples comments.