pensions

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San Diego (and maybe California) gets a lesson on the letter C

Byuclafaculty

The City of San Diego just discovered that the C in a DC pension stands for Contribution. Actually, it stands for immediate Cash Contribution. San Diego was the poster child for bad defined benefit pension management even before the current pension crisis in California. However, a potential ballot measure in that city that would switch over to a defined contribution plan is raising questions. The discovery of what C means is good for UC even though we have nothing directly to do with San Diego. Among the various pension changes that have been floating around at the state level as…

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Coming Soon to a Polling Station Near You?

Byuclafaculty

As noted in a prior post, one proposed pension initiative that could have overridden the Regents’ December changes in the UC plan has been abandoned and no signature-gathering campaign will be conducted. But there are others possibly on the way, as calpensions.com reports (excerpt): …Dan Pellissier, president of California Pension Reform, is working on an initiative that would cap normal employer contributions at 6 percent of pay and give new hires a 401(k) plan. The employer would be responsible for any previous “unfunded liability,” allowing employer contributions to exceed 6 percent until the debt is paid off. Employees could negotiate…

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All Clear Siren on Pension

Byuclafaculty

From the Sacramento Bee State Worker blog today: Former Republican Assemblyman Roger Niello said he will not pursue a signature-gathering campaign for his pension reform proposal because of the diminishing likelihood of a special election on taxes later this year. “Our urgency is gone,” he said. “The reason for filing this measure was to have something in line for a November election alongside the measure on taxes, but that appears unlikely to happen now.” … Full article at: http://blogs.sacbee.com/the_state_worker/2011/05/niellos-pension-reform-initiat.html#ixzz1NNCGZ65A Possible translation: I don’t have $1 million+ needed to get the signatures.

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Pension Initiative OK’d for Circulation

Byuclafaculty

The pension initiative that was filed by legislative Republicans negotiating with Gov. Brown on the state budget now has a title and summary language and so it can be circulated for the needed signatures. It includes UC and would override the Regents’ pension changes enacted last December. Like all initiatives, however, unless someone wants to spend $1-$2 million for commercial firms to get those signatures, it won’t go beyond this stage. The added summary language is below. The actual text of the initiative is below that:May 23, 2011Initiative 11-0007 (Amdt. #1-NS.) The Attorney General of California has prepared the following…

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LAO wrecks hybrid (pension plan study)

Byuclafaculty

The Legislative Analyst’s Office has opposed a plan in the governor’s budget proposal to give CalPERS funding to study a “hybrid” pension plan for all state public pensions, not just CalPERS. CalPERS is on record as opposing such a plan, so giving it funding to do a study may have been a way for the governor to sink the idea. Under a hybrid plan, there is essentially a cutback defined benefit pension and a defined contribution element. The LAO position is at http://www.lao.ca.gov/laoapp/budgetlist/PublicSearch.aspx?PolicyAreaNum=42&Department_Number=-1&KeyCol=430&Yr=2011

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Video: The Governor’s May Revise News Conference

Byuclafaculty

An earlier post on this blog analyzes the May Revise news conference held by Gov. Brown on May 16. There is video of that news conference on the governor’s website but – at least on my computer – it tended to pause and freeze. The version on the calchannel was even worse and caused a total crash at one point. So below is the video transplanted to YouTube by yours truly which works best. It is divided into 4 parts due to YouTube time limits. Part 2, it might be noted, contains a statement by the governor that he would…

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Will Crane Fly?

Byuclafaculty

Earlier blog posts have noted the appointment in late December of David Crane to the UC Regents by outgoing Governor Schwarzenegger. Crane is noted for his advocacy of putting public pension changes on the ballot, e.g., http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/02/04/EDU01HHUPL.DTL As the article below notes, Crane has yet to be confirmed by the California Senate and is facing considerable opposition. It is possible, however, that as part of some larger deal on the budget – which could itself involve pensions, Crane would be confirmed. If that happens, there would be a voice on the Regents that might be advocating some future ballot proposition…

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Bemoaning the CAP

Byuclafaculty

Below is an excerpt from the New York Times Bay Area online edition. It points to the various times when the UC pension was overfunded but pay was frozen (or cut), the Regents diverted some pension funds to the CAP programs in lieu of cash. The CAP programs were basically like mini cash balance plans, i.e., tax deferred savings accounts with a fixed interest rate on the balance. A little-noticed cash benefit for some University of California employees is adding strain to the system’s battered pension plan just as the university prepares for a $500 million reduction in state aid,…

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Steamroller Could Be Approaching on Pension

Byuclafaculty

The California business community is pushing for a grand deal on the state budget which would include pension reform of some type. And, as yours truly endlessly points out on this blog, UC’s pension modifications approved by the Regents last December could be steamrollered through some ballot proposition that would be part of the deal. No sign yet, however, that UCOP or the Regents are taking active steps to avoid that outcome. From the San Francisco Chronicle online: Using bizspeak, the (business) leaders say they think that California should have a “financial workout plan.” In the business world, a financial…

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Pension Initiative Advances Toward Petition Stage But Is It For Real?

Byuclafaculty

When initiatives are filed, the Legislative Analyst’s Office (LAO) provides an analysis, primarily of budgetary implications. Readers of this blog will know that an initiative was filed – apparently as part of the negotiations strategy of Republican legislators with the governor – which would put certain limits on public pensions. The LAO has now provided an analysis. The initiative would affect both new hires and current employees with regard to an increase in the minimum age of retirement. It is pointed out in the LAO’s analysis that this provision might well be illegal. The initiative also sets a 60% cap…