The Next Round of Pension Reform Is Here
Just when we thought the attack on our pensions was over, there is a group out there trying to mount another offensive. These folks were not satisfied with the current reform affecting new hires and making current employees pay their fair share and then some. They do not believe the current reform does enough toward making positive strides in covering the unfunded pension liabilities. Unfortunately, the dismal returns experienced by CalPERS this past year provide these folks with fuel for their fire. Therefore, they have come up with an alternative scheme to make sure the plan is funded at a faster pace. The new plan is to eradicate defined benefit (DB) pensions, effective 2018.
Your PORAC leadership is working diligently to alter the direction of this ill-intentioned group. However, just like with any previous detrimental legislation, we need your assistance. It is imperative that you do not sign any petitions without first knowing exactly what you are signing. Inform your family, relatives and friends so they can assist you in this endeavor by doing the same. There are going to be numerous initiatives coming up for the 2016 election cycle. Some of those may be worthy causes, but along with the worthy causes are the harmful ones; therefore, it’s imperative to be informed. You may need to educate your family and friends about what we are doing to pay our share of retirement costs. Under PEPRA (Public Employees’ Pension Reform Act), you will be paying up to 12% of the normal pension cost for your organization by 2018. Some of you have taken steps toward meeting that benchmark through recent contract negotiations. Yet another portion of our members have already met the benchmark through concession-based bargaining.
What I fail to understand is that even though the economy is moving in the right direction and making positive strides, it is not enough for these folks who are trying to raid your vested interests. These folks believe that taking you back to a defined contribution plan that is totally dependent on market returns and fluctuations is the answer. Their ultimate goal is not motivated by doing the right thing or making sure municipalities avoid bankruptcy. They are motivated by greed, since these are the folks who will be managing your investments. While a well-managed deferred comp plan is great for augmenting your retirement benefits, most of you saw what can happen to those contributions when the market has a major downturn. Ask those who had their life savings invested in Enron where their investments are today.
Due to a slower than expected economic recovery, along with a dismal year in returns for CalPERS, the sharks are smelling the blood in the water and finding that this is as good a time as any to strike. This is why your region and chapter meetings are extremely important. You have the opportunity to find out firsthand what is occurring throughout the state and your local area, as well as gather additional information to share with your family, relatives and friends as to what these ill-motivated individuals are plotting next to affect your livelihood. Most of your region meetings are occurring at the beginning of this month. You can check on the (new!) PORAC website and find out where your specific meeting is occurring. You will have an opportunity to interact with your PORAC executive officers and get the latest on what the “sharks” are doing.
Be safe and have fun.