Showing posts with label pension reform. Show all posts

Double Dipper: Jerry Brown's Secret Pension


Via Roger L. Simon, here's an investigation by the OC Register into the secret pension of Jerry Brown, the Democrats' candidate for governor of California. I say "secret" because the pension is part of a fund that was supposed to have been eliminated 20 years ago, and the pension administrator refuses to identify its legal basis, the method of calculating benefits, or even whether Brown is the recipient. As these are funds paid by the public, that is an odd position for a moralizing scold like Brown to take:

As Jerry Brown grabbed the spotlight with his criticism of Bell city officials and their outrageous pensions, The Watchdog got to wondering: How much will the Democrat for Governor make in retirement?

That, as it turns out, is a very difficult question to answer. After more than a month of investigation, the Watchdog can only say for certain that Brown and a handful of other top officials are eligible for generous benefits under a special pension fund so obscure that few people in government know how it works and many thought it had been eliminated 20 years ago by outraged voters.

Under the law, Brown should have accrued, at most, 16 years of service credit in this special fund, known as the Legislators’ Retirement System, or LRS. Actuarial statements produced by LRS, however, indicate that an unnamed person of Brown’s age and earning Brown’s exact salary has been credited with 25 to 29 years of service. The difference would mean tens of thousands of dollars in additional pension payments for Brown each year.

Brown’s campaign staff acknowledge the unnamed person sure looks like the gubernatorial candidate but have been unable to explain the discrepancy over service.

Officials at the California Public Employees’ Retirement System, which manages LRS, have similarly refused to cooperate, saying the law forbids them from answering questions about specific individuals. Meanwhile, The Watchdog has sought help from the offices of seven state lawmakers, one constitutional officer and one state department as well three outside pension experts and not one has been able to explain the discrepancy.

The immediate problem is that Brown is drawing benefits equal to 25 years of service, but he only served 16 qualifying years. CALiPERS is cagey on how 16 became 25, but the reporters surmise that Brown must have counted the year he spent as a clerk for the state Supreme Court and the 8 years he spent as mayor of Oakland, which makes sense. Speaking of Oakland, Brown is not presently drawing the pension because he is serving as State Attorney General; see, you can't double dip serving in state office. But, Brown was apparently drawing his pension during at least part of his tenure as mayor of Oakland. He became eligible for payments when he turned 60 in 1998. Double dipping isn't illegal, of course. But, it's the sort of thing that tends to rub voters the wrong way. Pensions are theoretically supposed to be for one's retirement, not part of one's annual income while they continue working.

(BTW, a Brown spokesman cheekily told the Register that if they were really worried about Brown's pension, they should vote him into office so he would continue to be barred from receiving funds. Haw Haw. Spoken like a liberal who is confident the state MSM won't ask too many questions about this.)

The pension at issue has an interesting history, and is a perfect example of how California liberals will go to great lengths to preserve their perks and power, even in the face of popular will arrayed against them. Brown's pension was supposed to have been eliminated by Prop. 140, the same proposition that established term limits for state officers. That was the understanding of the voters at the time (late 1980's) and the proposition's proponents. Indeed, Democrats like Brown were the specific targets of Prop. 14o, one of many conservative propositions that frustrated Californians have passed over the years, yet were then willfully subverted after passage. The judicial cancellation of Prop. 8 is the latest manifestation of this, but the careful preservation of Jerry Brown's pension gives you an idea of the lengths liberals will go. Meanwhile, "liberal" propositions - whether for high speed rail, K-12 education funding (which straight jackets the budget process), regulating the size of chicken coops or banning the sale of horse meat - take on the force of holy writ. Yet another reason for the initiaive process to be reformed or eliminated all together.

More broadly, this is a problem for what it says about Brown, and the wages of progressive governance that California has been buried under by his fellow libs. Brown is old enough to be drawing a pension, an apt symbol of someone past their working age, yet he is seeking to be governor of California, a state wracked by - among other things - out of control pension payments to state workers, especially those state workers who have served in management positions. Brown, and his ilk, are the ones who set this system into motion; granted to themselves lavish benefits; and now ask to be holding the levers of power when pension reform is heading towards the top of the state's agenda. If that is to be our fate, can we at least have a discussion as to whether Brown is really the man for the job?

Pension issues have not really been an issue in the campaign (yet), but Brown's fitness as someone to preside over pension reform would be questionable even under the best of conditions. He is running, after all, as the standard bearer for "progressive" Californian governance as practiced by Jerry, his dad, and countless Democrats. But, the voters, it seems, are going to be spared this history lesson. Too bad.


Give and Take: Pension Reform


The NY Times "Your Money" section looks at the painful choices facing states considering pension reform and the pensioners who are in the cross hairs. The Times is looking at Colorado, but it could be virtually any other state in the union, especially over-extended Blue States: Battle Looms Over Public Pensions
There’s a class war coming to the world of government pensions.

The haves are retirees who were once state or municipal workers. Their seemingly guaranteed and ever-escalating monthly pension benefits are breaking budgets nationwide.

The have-nots are taxpayers who don’t have generous pensions. Their 401(k)sor individual retirement accounts have taken a real beating in recent years and are not guaranteed. And soon, many of those people will be paying higher taxes or getting fewer state services as their states put more money aside to cover those pension checks.

Consider what’s going on in Colorado — and what is likely to unfold in other states and municipalities around the country.

Earlier this year, in an act of rare political courage, a bipartisan coalition of state legislators passed a pension overhaul bill. Among other things, the bill reduced the raise that people who are already retired get in their pension checks each year.

This sort of thing just isn’t done. States have asked current workers to contribute more, tweaked the formula for future hires or banned them from the pension plan altogether. But this was apparently the first time that state legislators had forced current retirees to share the pain.

Sharing the burden seems to be the obvious solution so we don’t continue to kick the problem into the future. “We have to take this on, if there is any way of bringing fiscal sanity to our children,” said former Gov. Richard Lamm of Colorado, a Democrat. “The New Deal is demographically obsolete. You can’t fund the dream of the 1960s on the economy of 2010.”

But in Colorado, some retirees and those eligible to retire still want to live that dream. So they sued the state to keep all of the annual cost-of-living increases they thought they would be getting in perpetuity.

Incredibly, the Times analyzes this in class war terms, with public sector employees on one side and voters on the other. This is the essence of the Codevilla analysis that has swept the Right. Nice to see the Times taking it mainstream. I'm sure they didn't mean to.

Technically, we here at Free Will have no patience for public sector union members demanding their "fair" share. Still, I'll pause and note that, if you are, say, a 75 year old retired teacher, you have a legitimate complaint about how the rules are suddenly changing after your active working life has ended. But, we know how any attempt to reform pension would go down. The media would be filled with weeping 80 year old blue-haired women being consoled by former students who say "Ms. ____________ changed my life." In fact, I would urge any would-be pension reformers to figure out a way to leave the pensions of true retirees alone. By true retiree, I mean someone over the age of 65 (and really America's de facto retirement age should go up, too), or who is permanently disabled or otherwise unable to work. Otherwise, pension reform is self-demagouging.

Because, here's the thing. Not all of these retirees are what you would call "retired." Oh, sure they're not working, but that doesn't mean they can't. The Times notes that the average retirement age for Colorado teachers is 58. 58! Those are able bodied people who - if they were in the private sector - would still be working. It's easy to imagine today's 58 year old living for quite a while. 15 years? No problem. 20? Sure. 30? It's within the realm of possibility. 40? Hey, the generations that smoked, drank and ate red meat have been living into their 90's. The acturial fact is that many of these "retirees" are going to have retirements that could easily exceed the lengths of their careers. You're telling me that, because someone taught math for 30 years starting at age 25, that taxpayers should be supporting them for another 30 years? I just don't see the moral or fiscal case for that.

The union position is that they were promised these pensions, that they made career plans and financial decisions based on them, and it's not fair to change things now. And, I agree it's not fair. But, you know what also wasn't fair? As part of its bankruptcy re-organization, United Airlines was able to default on its pension obligations, the largest such default in American history. I don't remember hearing too many tears being shed over that. But, dare to suggest that public sector pensions - or those of favored private unions like the UAW - be reduced? May I fit you for a tar and feather tuxedo, sir?

It's a strange kind of fairness that liberal shibboleths have lead us to. Unions are supposed to ensure a more equal distribution of wealth, so that labor benefits from the wealth it creates. But, clearly some unions are more equal than others, and some are deserving of a higher level of fairness than others.

Meanwhile, here's something for Colorado's teachers, and people like them to chew over. You dutifully voted for Democrats all of your adult lives. For all the talk of "society" promising you these pensions, the fact is that it was Democrats who made these promises, while demonizing anyone who objected. And, you were happy to go along with that. But, now you are getting older, and in many cases, entering your last decades, and these same Democrats are making noises like those of Richard Lamm - a guy who thinks you have a "duty to die," btw - saying, gosh, you teachers are going to have to start sacrificing. Hey, they got your votes already. Why should they care now?


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