Late Monday afternoon California Attorney General Kamala Harris released the state’s official title and summary for the ballot initiative promoted by San Jose Mayor Chuck Reed and others to reduce the retirement benefits of state and municipal workers. Harris’ wording had been anxiously awaited by Reed and his colleagues. In 2012 a different group of pension-cutters abandoned their measure, according to the Sacramento Bee, after they tested Harris’ summary and found it would make their measure radioactive at the polls.
Reed had called his proposal the Pension Reform Act of 2014 and, no doubt, had his fingers crossed that it would appear that way on a future ballot. If so, he was in for a disappointment, as the attorney general rebranded the measure as the less lyrical Public Employees Pension and Retiree Healthcare Benefits Initiative Constitutional Amendment. To the pension-cutters’ further chagrin, Harris’ description placed teachers,
In 2011, the University of California, Berkeley Center for Labor Research and Education put out a study that should have sparked mass rallies up and down the Golden State. The report found that nearly half of California workers will retire in or near poverty. In other words, a state once synonymous with the American Dream of economic opportunity and security is on a path to become a purgatory for millions of seniors.
It’s hard to square this alarming fact with the revelation last month that a group of mostly ultra-conservative electeds and activists will try to place a statewide measure on the 2014 ballot that would slash the pensions of government workers. The group, headed by San Jose Mayor Chuck Reed, includes Texas billionaire John Arnold, who has made “pension reform” a personal crusade.
The initiative would not only cut the retirement benefits of future public sector workers,
It’s official: America has entered a retirement crisis. Or, as Forbes understatedly put it, “the greatest retirement crisis in the history of the world.”
And, while the causes are manifold — the demographic bulge of baby boomers leaving the fulltime workforce; greater worker longevity; the disastrous, 30-year shift from traditional defined benefit pensions to costly 401(k)-style plans — most experts agree that the national retirement implosion has gone critical, with an estimated 75 percent of Americans who are nearing retirement age having less than $27,000 in their retirement accounts.
Even John C. Bogle, the founder of the $2 trillion mutual fund and 401(k) behemoth Vanguard Group, recently admitted that the system of retirement plans that rely on 401(k)s is broken.
“[401(k)s were] designed as a thrift plan, and it doesn’t work as a retirement plan,” Bogle declared.
So it is with some irony that a Texas hedge fund billionaire/former Enron trader and a politically ambitious Northern California mayor have teamed up to cripple one of the few parts of the retirement story that still works — California’s public-sector pension system.
Last week San Jose Mayor Chuck Reed delivered his usual speech about the benefits of slashing the retirement benefits of his city’s public employees – and why he is now pushing for a statewide ballot measure that could dramatically change the lives of hundreds of thousands of Californians. Reed’s initiative – which he characterizes as a bipartisan effort and which hasn’t yet qualified for the 2014 ballot — would allow the state and local governments to reduce retirement benefits for current employees for the years of work they perform after the measure’s changes go into effect. What was not usual about Reed’s speech was its setting: The Roosevelt Hotel in New York City, 3,000 miles from California.
The latest chapter in the efforts to dismantle California’s public-sector retirement system was officially opened Tuesday when San Jose Mayor Chuck Reed submitted paperwork that begins the process of qualifying his latest pension initiative for next year’s statewide ballot.
The filing brings to a climax weeks of speculation about the timing of the proposed law after Frying Pan News first confirmed rumors of its existence when Gary Cohn published a leaked draft version last month and when we reported Reed’s remarks, delivered before a Hoover Institution conference on pensions, that indicated he was uncertain whether he would file for the 2014 or 2016 ballot. Now Reed is certain: It’s 2014 or never.
Called the Pension Reform Act of 2014, the measure seeks to rewrite California’s constitution in order to bypass its current guarantees of public pension rights. If passed by voters,