Pensions like it's 1999: Good Start
If there was one moment that foreshadowed California's long, sad descent from multibillion-dollar surpluses to deficits as far as the eye can see, it was that day in 1999 when the Senate approved legislation to increase pensions for state workers and opened the door for even bigger retirement checks for local employees.
The discussion on the floor of the Senate took less than one minute, and it was tragically myopic, focusing not on how the bill would affect employees generally or on what it would cost the taxpayers but on the goodies the measure would grant to the Legislature's own security force.
The few lawmakers who cared were told that the bill, SB 400, would essentially be free. The bigger benefits, the experts said, would be paid for by a surplus in the retirement fund. With that assurance, the bill passed on a vote of 39-0 and was sent to Gov. Gray Davis, who promptly signed it.
Now Gov. Arnold Schwarzenegger is asking the Legislature to return pension formulas for newly hired state workers to where they were before that bill was enacted. The governor's proposal, because it cannot apply to current workers, won't help balance next year's budget. But it is still a good idea.
SB 400 was a mistake.
http://www.sacbee.com/opinion/story/1990754.html
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As California goes through the financial mess, just think what's been created with pensions - the vote on SB 400 in 1999 basically increased pension payments, based on an excess of funds in the pension reserve - but market crashes wiped out that excess, plus. Now, how stupid are the reps for thinking that this was a free deal, so it passed 39-0?
Also, the private sector has virtually eliminated guaranteed pensions but CA governent and probably Federal Government continue to offer guaranteed pensions - 100%. What's up with that? In addition, State workers are probably well taken care of on the health insurance side at retirement. Can we afford this?
We are so screwed at so many levels in America.