Opinion: It’s time to tell the truth about public pensions

It is absolutely worthwhile to consider how to ensure that California’s public pension systems remain on a sound footing and able to provide a secure retirement for public workers.

To help bring such stability, state employee unions have already gone to the bargaining table – the best place in our view to work out pension changes – and negotiated agreements that significantly tightened the state’s pension formula and doubled what workers will pay towards their own retirement. We have supported curbs against pension spiking, backing strong legislation last year – unaccountably vetoed by Gov. Schwarzenegger – that would have virtually ended the practice.

We pledge to continue working in good faith at the bargaining table for needed changes. But we have also made it clear that the discussions surrounding public pensions must focus on the true issues and not those manufactured to make a political point.

It is a position we expressed in the following letter to the governor and legislative leaders. It noted that for the past several budget cycles, California’s public employees have agreed to concessions that have saved state government hundreds of millions of dollars. We have suffered personal financial uncertainty from furloughs and pink slips, compounded by the devastating effects of an economy wrecked by Wall Street. We serve the public for pay that sometimes pales in comparison to what we might earn in the private sector. And the billions of dollars we spend in our local communities are vital to the economy.

We support the governor’s budget proposal and will continue to work with him and legislative leaders to help balance the state budget. But we implore them not to buy into the myths and falsehoods behind new efforts by some Republican lawmakers to undermine the state’s collective bargaining process and deprive public service workers of retirement security.
A host of inaccuracies have cast a dark cloud over public pensions. Claims that pension costs will bankrupt state government are flat wrong; California’s entire contribution to retirement for state employees is less than 5 percent of the state budget. Meanwhile, headlines blaring that pension plans are headed for Armageddon are unsubstantiated.
CalPERS has earned back more than $70 billion since the financial crisis and the system’s funding status is estimated near 70 percent. The state of California pays less as a percentage of payroll for pensions today than it did in 1980.

Just as we have worked with lawmakers to help fill the state’s gaping budget hole, we support reasonable approaches to clamp down on fraud and abuse in California’s pension system. Yet let’s be clear that only 2 percent of retirees have pensions above $100,000; the average CalPERS pension is about $25,000 per year. Half of CalPERS retirees receive $18,000 per year or less in benefits. Unlike the private sector, many public employees do not receive Social Security, making their pensions their sole source of retirement income, other than savings.

California public employees already pay 7 to 10 percent toward their pensions. We want to be able to focus on what matters most: providing a fair and livable wage and retirement for the people who serve California. We respectfully ask that you consider these facts, and the gravity of the consequences of ill-conceived proposals to dismantle California’s pension system. Doing so would be a mistake beyond comprehension not only to state workers, but to California’s entire economy and every Californian that deserves a secure retirement.

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