Call it the tale of two pension crises. In June, the Los Angeles Times’ business pages looked at the looming retirement savings disaster caused by the nearly 40-year transition from employer-sponsored defined-benefit pensions to individual 401(k) plans — a sea change in retirement insecurity, it noted, that “has been a failure for all but the wealthiest Americans.”
On Tuesday, California Attorney General Kamala Harris will release the official title and summary that will appear on the 2016 ballot for former San Jose mayor Chuck Reed’s latest statewide public-sector pension cutting initiative.
That language will finally end speculation on how far Harris will go in describing the sweeping scope of the proposed constitutional amendment. Legal analysts have charged that it contains a hidden trigger aimed at not just slashing pension benefits but annihilating 60 years of state pension law along with the vast retirement systems that together guarantee the retirement promises made to California’s public employees.
Initial clues as to what might appear on the 2016 ballot emerged last week as the first formal responses by state officials to the proposed measure began to trickle in.
The stakes for all Californians in the so-called “Voter Empowerment Act of 2016” couldn’t be higher.
For Reed and his supporters,
When Democratic former San Jose mayor Chuck Reed and Republican ex-San Diego councilmember Carl DeMaio finally unveiled the language for a promised attempt at getting a statewide public pension cutting measure to 2016 voters, the expectation was that Reed II would be a reined-in and more realistically-framed version of Reed I – last year’s failed attempt at undermining the public pension system.
That try for the 2014 ballot was aborted after Attorney General Kamala Harris slapped it with a candid, albeit politically untenable summary that frankly described the proposed constitutional amendment as targeting longstanding legal rights—rights that protect the pensions and retirement health care of the 1.64 million Californians enrolled in the state’s public pension systems.
But even veterans of the state’s public-sector retirement wars were unprepared for the sheer scale of what awaited them this time around.
Capital & Main recently looked at a spate of negative headlines about public pension funds, spurred by data that State Controller John Chiang released on his new public data site at ByTheNumbers.sco.ca.gov.
Chiang has served as Controller since 2006, acting as California’s Chief Fiscal Officer. He was recently elected as State Treasurer and will switch to that office next year. In both roles, Chiang sits on the Boards of Administration for the two largest public employee funds, California Public Employees’ Retirement System (CalPERS) and the California State Teachers’ Retirement System (CalSTRS).
Capital & Main followed up with the Controller to ask about the state of pension systems in California and how those systems should be looking to the future.
The data you posted on your By the Numbers site led to many existing critics of pension saying “See?
Four years ago I retired from active ministry in the United Methodist Church. My wife Susan and I now live a comfortable, middle-class life based upon the three pillars of retirement. We both receive Social Security. We get a monthly check from my pension plan. We hold some savings. But that’s not true for most Americans.
Yes, retiring workers can look forward to Social Security if they have paid into it. But that automatically excludes some. Government employees, for example, get pensions, but not Social Security. Undocumented workers may have the Social Security tax deducted from their paychecks, but the funds likely go to an account that does not bear their names – therefore, they will not get those payroll taxes returned to them when they age into eligibility.
Besides, Social Security was from the beginning expected to provide supplemental income only, not the sole basis for a livelihood.