Tuesday, September 4, 2012

The Pension Plan ........

The theory of Pension reform here  in California may have earned Jerry Brown a chair in the Wisconsin seat. Jumping ahead of former Gov. Schwarzenegger who tried and tried to reform the pension system . Jerry Brown now has left many public employee's with sticker shock . Anyone who earns over 110,000 will have to contribute almost 50 % to their retirement , and felons can no loner receive a check . So what means all this mambo jumbo? However, some of the governor’s proposals go too far and run the risk of undermining retirement security for thousands of California school bus drivers, special education aides, custodians, school cafeteria workers and their families . These people always make below 60,000 a year . Yet their being punished right along with the 'rich' and often upper echelons of the public employee system that earn high salaries and are considered "middle income  earners"  & "middle class"The salary of future hires that will be considered for pension purposes will be capped. The ceilings: $110,000 for employees who participate in Social Security and $130,000 for those who don't, such as fire fighters, police and teachers.Brown's proposal to put new hires in hybrid pension plans won't happen. Instead, the pension formulas for new hires -- both safety workers such as police and firefighters and miscellaneous employees -- will be rolled back.New employees will pay half of their normal pension costs. Employers would still have to bargain contribution rates for current employees.Miscellaneous employees -- the largest category of workers -- would have to wait until their 67th birthday for maximum retirement benefits, compared with age 62 for most current workers. Future safety employees -- including police, firefighters and prison officers -- would would have to wait until age 57 to qualify for maximum benefits. Depending on their employer and contract, current employees in those jobs can retire as early as 50 years old and receive maximum benefits, although that happens relatively little. Brown contended his package would save $30 billion over the long run.. REALLY? the unfunded pension liability for California is over $800 BILLION and skyrocketing today....Governor Brown is trying to ram through an unnecessary and dangerous restructuring of the retirement system for California public employees.  This is part of the same attack we have seen in other states and  is based on the false premise that the systems are in crisis. While both CalSTRS and CalPERS are currently underfunded, this under funding is not the result of overly generous retirement income for the majority of workers, but rather the result of the collapse of financial markets that resulted from excessive greed and risk-taking by Wall Street firms.  You know what no one is saying, in California or elsewhere? Because older public employees manipulated the political process to get a series of retroactive pension enhancements in the 1990s, younger generations of public employees will be vastly worse off in total compensation than past public employees. Future public employees will receive lower benefits than current public employees had been promised to begin with, to make up for what was taken, not paid for, and not given back.

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