Oakland's Pensions time bomb State, National, International, posted by Anti-PUBLIC unions, a resident of the Another Pleasanton neighborhood neighborhood, on Jul 29, 2012 at 5:00 pm
Oakland has a generous pension plan. The 1,086 current retires, get raises to match 2/3 of pay of current workers, ++ Oakland has now closed this plan to new employees, and passed a parcel tax, of course too little, too late !
Oakland can't meet it's obligations, so last month, the majority of Oakland City COuncil, at the urging of Mayor Quan, voted to borrow money once again to cover their pension bill----$210 million in new pension BONDS that will cost $105 million in INTEREST over the next 14 years.. That way, the loan will allow the city to avoid paying for the pensions from the 'general fund. The next generation has no chance. This latest crisis of IRRESPONSIBILITY looks like an inevitable bankruptcy in the not too distant future.
As an Alameda County neighbor, I can't help but think of Germany and irresponsible Greece.
As an Alameda County taxpayer, as well as the state of California, I say it is time all municipalities in this state put all public union contracts on ballots for a vote of taxpayers in each local juristiction. It is only logical and responsibile to have approval of the taxpaying employers. We should vote.
Posted by Posted by Pensions were never the problem, a resident of the Another Pleasanton neighborhood neighborhood, on Jul 30, 2012 at 2:17 pm
The problem is that government employers got a free ride when times were good.
When interest rates were very high, pension funds were invested so well that governments were allowed to reduce or stop paying toward employee's pensions, because of the interest or return on the investments.
But when interest rates came down, pension funds just burned away their funds, and did not promptly ask employers to pay, or to pay enough. Eventually that caught up to them, and employers not only have to pay, they need to make up for some of the prior free ride.
CalPERS, UCRS, and the teachers pensions are similar in this.
Yes, the employers now need to pay more. If they'd paid all along they would not have this shortfall.
It is interesting to see news articles that say last year CalPERS was getting a 17% rate of return on investments. This year they only got 1 %.
Employees did not cause the recession, and cutting the pensions that they are entitled to, based on years of service, will not solve today's problems.
Posted by Arnold, a resident of the Another Pleasanton neighborhood neighborhood, on Jul 31, 2012 at 11:44 am
Yes! Pension tsunami!!!!!! This is what I've saying for years. ForGET about what 'Pensions were never the problem' has to say. Who wants to argue against THAT? Just listen to the crickets and woodpeckers!!!!! Read the rightwing blogs!!!!!! It's coming!!!!! Hold onto you horses!!!!!! C'mon folks, we need to start paying all public workers minimum wage. It's the only way to stop the big FLOOD that's coming our way. And what 'Pensions were never the problem' has to say????? Forget it. It's not worth it.
Posted by Maybe some Pensions are a Problem, a resident of the Another Pleasanton neighborhood neighborhood, on Jul 31, 2012 at 12:26 pm
The purpose of pensions is so working people after a career of service can afford to retire. Often Public Servants work for less than private business and put up with lousy working conditions, but they used to have some job security, and of course the pension.
Pensions used to be a way to get and retain good workers, while paying salaries less than industry. Money set aside every year to pay for the pensions later would grow as it was invested to pay the costs later. All done based on actuarial numbers, compound interest, like buying an annuity. See:
But you do have to set aside the money needed every year! That's what is missing.
If you pay Public Servants minimum wage, you'll only get people not smart enough to get a real job - not quality service. Would you want a school nurse who couldn't keep a better paying private job taking care of your kids? Would you want your traffic signals maintained by a guy who doesn't know which end of a screwdriver is which?
Often Public Servants are not on Social Security, so the pension is very important to them. Then they usually get a percentage of what they were making. If the formula is 2% at 60, after 20 years on the job, a worker might get 40% of their salary at retirement - then usually does not get enough annual increase to keep up with inflation later. Can most people live on 40%? Believe me food, gas, and rent do not get much cheaper once you retire- unless you move to Arizona, and/or eat nothing but rice.
However: Directors and Administrators and others in Management roles who are now paid huge multiples of what working people make can probably afford to invest some of their own money if they wish to continue in the style they have become accustomed after Retirement.
Perhaps there should be an upper limit on how much salary is eligible, indexed to inflation, but set so most workers can retire, but maybe not afford a new Ferrarri every year? What do you think?
Posted by Pensions- BIG problem, a resident of the Another Pleasanton neighborhood neighborhood, on Jul 31, 2012 at 2:33 pm
While all Pleasanton pensions are hyper-inflated because of formulas, reduced years of service required to qualify which leads to longer payouts and shorter pay-ins, retroactive pension benefits that amount to tax dollar giveaways for no additional service, and the excessive wage increases Pleasanton has paid over the past decade, especially to police & fire, have only increased the problem to the point of no return.
CalPERS is very corrupt organization that has and continues to be nothing more than a public employee union advocate for more and more public employee union perks. And now they are threatening any and every city that wants to claw back some the benefits because CalPERS FAILED to deliver on their SB 400 promises; namely that it wouldn’t cost municipalities a penny. They are supposed be a pension plan administrator. Not sure when CalPERS morphed into the role of union thug, financial muscle, and lobbyist for every public employee union in the state (using to taxpayer money to do it - to the detriment of the taxpayers) but it has happened.
It is safe to say the Public Employee Unions & CalPERS were in cahoots as far back as 1999 when SB400 passed. That is the legislation that allowed for increased pension benefits for public employee union members and also allow those benefits to become RETROACTIVE to the employees first day on the job - even though the employees themselves were making contributions based on lower priced benefits (Pleasanton Employees haven‘t contributed anything in years). Now the tax payers are getting stuck with a massive debt because the employees, their unions, their funded council members, State legislatures, and CalPERS have been selling taxpayers rotten fruit.
Regarding SB 400 & AB 616, CalPERS promised municipalities that they would decrease their annual costs for a decade - it wasn't cities that came up with the plan. CalPERS used that carrot to help get the unions what they wanted - access to the excess funding in the CalPERS plan that amounted to 132% of obligations (2001). This was essentially a rainy day reserve fund that would have protected taxpayers from cost increases that are certain during normal investment cycles.
The increased benefits, retroactive benefits, and shortened retirement age requirements have depleted the funds at an alarming rate. Pleasanton’s CalPERS plans have gone from over funded (super-funded at about 130%) to less than 60% funded in just 10 years, even though the cost of the benefits payment by the city/taxpayers has almost tripled and unfunded liabilities have when from Zero to 100‘s of millions in what seems like 60 seconds.
Oakland is already bankrupt - toast! The only thing happening in Oakland is more deferral of debt while not addressing the problems, further punishing of city finances and residents by restructuring and back loading debt, and just flat out making thinks worse, by an order of magnitude, when the inevitable bankruptcy happens. The city is controlled by the unions and that is certainly a contributing factor to the ills they face.
BIG PROBLEMS LOOMING: CalPERS began last year with 239.5 billion in assets, recently reported a return of 1%, and ended their FY 2012 with 234 billion in assets. Not Good!
What did the Fire Department receive in wage increases during the great recession? Was it:
Posted by Pension Tsunami, a resident of the Downtown neighborhood, on Jul 31, 2012 at 5:24 pm
It will become obvious to folks soon ... have you been to Vallejo or Stockton lately... community parks, streets are no longer maintained or closed, city services have been "gutted" ... but retired city employees still receive their retirement payments, benefits and increases ... when you see it and feel it ... it finally hits home ... you will question what am I paying taxes for?
When this happens in the private sector, people go to prison i.e, Madoff, Stanford, Lay etc
Posted by Jason, a resident of the Pleasanton Meadows neighborhood, on Jul 31, 2012 at 5:52 pm
How about we simply stop making public workers part of the 1%? If pensions are deferred compensation, as the IFFA states, then many public employees are in the top 1% and the majority of Bay Area public employees, are in the top 5%.
Posted by Pension Tsunami, a resident of the Downtown neighborhood, on Jul 31, 2012 at 7:44 pm
If Social Security is good enough for us peons ... it should be good enough for Public Employees...
But guess who decides what is good for the peons and what's good for Public Employees ... you guessed it the Public Employees (lawmakers) ... as I mentioned earlier, when this happens in the private sector they go jail...
Posted by to pension tsunami, a resident of the Another Pleasanton neighborhood neighborhood, on Jul 31, 2012 at 11:50 pm
I think you get it ... except for the part about social security being good enough for both public employees and peons. The public employee unions can care less what the peons think until it's time for a parcel tax, selling bonds, or promoting one of the many tax measures/schemes we are sure to see on the November Ballot.
Come November 7th, after the election results, these political sailors will have quietly slipped out of bed with the tax payers in the rush to determine how to spend the billions in new found loot provided by stupid taxpayers.
High-fives all around, liquor, and the extension of commission jobs until the money runs dry-which only leads to increased efforts to continue the payday with future efforts to find funding sources to keep the cycle rolling along.