We Heard You, Loud and Clear
It was evident that the prevailing message during the 2014 Conference of Members was centered on anyone attacking our pensions. Our members are fed up with the incessant attacks on our pension systems by virtually everyone. It’s amazing how quickly everyone forgot about the Public Employees’ Pension Reform Act (PEPRA) and its efforts to codify pension reform, requiring current employees to contribute more toward their retirement costs and significantly reducing the benefits of new employees, while requiring them to work much longer.
One of the first concerns brought to our attention at Conference was Stockton POA’s plight with Franklin Templeton. Stockton wanted to express their concerns about PORAC maintaining investments in Franklin Templeton after it was somewhat successful in attacking our pensions during the bankruptcy process. Stockton POA formally presented a motion recommending that PORAC divest itself from Franklin Templeton. As a result of Stockton’s request, I was given further direction by the Board of Directors to work with financial advisor Mark Sikorski to divest our shares in Franklin Templeton. Mark and I have been conversing and developing a plan to ensure that this action is conducted promptly, while also safeguarding that there are no detrimental effects to PORAC’s investments.
Stockton POA and I are requesting that associations review their investments and, if they have Franklin Templeton shares, consider divesting from an organization that is willing to attack our pensions in order to recover monies from an unsecured investment in the City of Stockton. In this case, Franklin Templeton made a business decision to provide the City of Stockton with an unsecured loan for more than $30 million. When the City defaulted on its loan by claiming bankruptcy, Franklin Templeton was going to stop at nothing to ensure that it recovered its monies. This meant Franklin Templeton decided to challenge what was once believed to be sacrosanct: the agreements between employees and their retirement systems. As a result, the federal judge made a preliminary ruling to the effect that our pension systems are not special and no different than any other creditor. Franklin Templeton’s poor business decision with the City of Stockton and its relentless pursuit in trying to fix its blunder created a small crack in PERS’ armor against bankruptcy proceedings. Franklin Templeton did not care about the Stockton employees or the rest of us, for that matter, when it decided to leave no stone unturned in trying to fix its poor business deal by attacking our pensions. As such, we must respond in the best possible way and that is to avoid, to the best of our abilities, providing any monies in the form of revenue, investments or otherwise to organizations that are willing to attack our pensions for their benefit.
Furthermore, unsolicited by PORAC leadership, the Executive Committee or Board of Directors, at Conference the membership brought forth another motion to increase PORAC dues by $2, to be sequestered and used to fend off any more attacks against our pensions. This motion did have some discussion, based on the possible detrimental effect it could have on associations that have to increase their members’ dues while everyone is still trying to recover from the Great Recession of 2008. Nonetheless, what can be more detrimental to us and our retirees than fending off more attacks on our pensions? The likes of Chuck Reed have not gone quietly into the night and are waiting in the periphery, gathering strength and support. Chuck Reed has clearly said that he is coming back at us in 2016, hence the reason that members decided to push forward with the dues increase.
There were a few agencies that expressed their concern about the increase and were most likely going to have to opt out, since trying to increase their members’ dues would prove to be a monumental task. I recently spoke with Angie, your Membership Services Representative, at the office, and she advised that the new billing was recently sent out. In addition to the increased dues, an opt-out form was included. Based on the motion passed, agencies have to affirmatively opt out of the increase by filling out the form. There is an alternative, if you feel that increasing your members’ dues would be detrimental to your organization and/or members. Some agencies have expressed that they will tabulate the amount of the increase and make a direct contribution to PORAC from their PAC accounts. This is an excellent alternative that keeps your members involved in the fight against pension reform by complying with the spirit of the dues increase. I can’t stress enough how important this increase is going to be when we face another pension initiative, whether at the local or state level, that will be aimed at adversely affecting all of us who are currently grandfathered. This is a great opportunity for association members to get involved and encourage your leaders to participate in this imperative cause.
We will continue to be under relentless attack on our pensions this year and the next; therefore, don’t forget to attend your chapter meetings to keep yourself, family, friends and colleagues informed as to how the attack on pensions and other issues are affecting your local area.
Be safe and have fun.