Californians Don’t Want Texas Billionaire to Tamper With Pensions
I have spent many years working in public schools in California, on a modest salary and for that I will receive a modest pension. I’m not complaining; that was the agreement that was bargained and what I signed up for. I’m grateful. Besides, I’m better off than many who have suffered greatly from the Great Depression. But believe me, California’s retired school aides, teachers, firefighters and others aren’t out shopping for mansions or private jets.
It’s high time to stop blaming public employee pension systems for state or local budget shortfalls. In California, state pensions systems have rebounded from the recession. CalPERS now is reporting a 12.5 percent return on investments for the 12 months that ended June 30, 2013 CalPERS 12.5 percent return is well above the Fund’s discount rate of 7.5 percent, the long-term return required to meet current and future obligations.
On top of that, public employees have done their part. More than 300 local unions have agreed to concessions — things like decreased contributions and delayed pay increases — in order to help cities, counties, and school districts balance their books. Also, Governor Brown’s pension reforms kicked in just a few months ago, representing a reduction in compensation to public employees statewide of between $60 billion and $100 billion. From my viewpoint, public employees keep giving and conceding, but it never seems to be enough.
So you might think public employees can catch a break. Not so.
Many working-class Californians who are in the middle of their careers are in danger of losing the retirement benefits they’ve been promised. Why? Because out-of-state billionaires and shadowy political organizations are trying to change the rules mid-stream.
For example, there’s a man named John Arnold. He’s a billionaire from Texas who made his fortune working at Enron then running a hedge fund. According to Forbes he’s worth almost $3 billion and runs a foundation worth another $1.2 billion. Now, he has started throwing hundreds of thousands of dollars into California, contributing money to a political entity that calls itself the California Foundation for Fiscal Responsibility, to try changing the rules on public employees’ pensions here.
One of this entity’s main goals is to alter pension rules for current public employees. I think of that through the lens of a law enforcement officer or firefighter — public safety officers who put their lives on the line every time that put on a uniform. Through collective bargaining, these workers have made a deal outlining their salary and benefits, and based on that contract have agreed to do a particularly hazardous job. Now there’s a threat these public servants might lose their pensions when many of them are mid-way through or nearing the end of their careers. That’s wrong no matter one’s views on pensions and no matter what argument one might make about governments’ budgets.
Truth is, Californians don’t want to rob current public workers of their benefits. In fact, a survey by the National Institute on Retirement Security earlier this year showed that, nationally, fewer then 1 out of 10 Americans thinks government employees’ pensions are too high. Seventy-two percent of them say teachers deserve their pensions because of how little they earn in salary, and 86 percent say police officers and firefighters deserve pensions because of how dangerous their jobs can be.
That’s probably also in part because voters understand the difference between working-class families and the wealthy CEOs who control things on Wall Street. The Economic Policy Institute published a study this month that showed CEOs make 273 times more money than the average worker. A generation ago that ratio was just 30-to-1.
I’m not savvy enough about Wall Street and the motivations of wealthy investors to know why a billionaire like John Arnold wants to change the rules related to the pensions of the millions of Californians who serve the public. However, I do know that Arnold doesn’t know the first thing about my retirement. He doesn’t have to worry about his own golden years — why is he meddling with mine?
Ed’s Note: Martha Penry is a Special Education Para-Educator at Twin Rivers Unified School District.