STUMP » Articles » Public Pensions Watch: California Goodies Reactions » 20 August 2014, 14:35

Where Stu & MP spout off about everything.

Public Pensions Watch: California Goodies Reactions  

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20 August 2014, 14:35

In my last post about the 98 (or 99) special pay elements included in pensionable income that Calpers recommended, I included two reactions to the proposal. I mentioned at the time, a hearing was going on that day.

Well, the hearing came and went. There are more reactions.

First from a few lovely committee members:

Before the votes, board member J.J. Jelincic drew a low murmur of approval by some in the CalPERS auditorium audience when he chastised local government employers for pressuring the board to disqualify temporary upgrade pay and other supplemental wages from pension formulas.

“This board is not your mother,” Jelincic said, noting that supplemental wages are created and controlled by employers for any number of reasons. “We’re not going to make you eat your vegetables. If you can’t deal with your problem, I’m not going to be the bad guy.”

Board member Richard Gillihan, who made the failed temporary-pay motion as Brown’s director of the Department of Human Resources, countered: “With all due respect to Mr. Jelincic, this is not about eating vegetables. It’s about proper application of the law.”

The governor objected to one of the 99

One item the committee supported Tuesday drew criticism from the governor. Counting extra pay given during short-term promotions goes against the intent of the Brown’s 2012 pension reform law and should be excluded, said Eric Stern of Brown’s Department of Finance.

Woo. That’ll show the board.

Now the editorials.

SFGate editorial:

The state’s major pension panel is on the verge of undoing retirement reforms that Gov. Jerry Brown and the Legislature put in place just two years ago. It’s a mistaken approach that defies Sacramento’s political consensus and invites costly paycheck manipulation.

At issue is a batch of salary sweeteners that reward public employees for various skills and duties in ways that boost basic pay and an eventual pension. Buried in the group is a brand of pension spiking, a tactic that allows a soon-to-retire worker to slip into a higher-paid position for a brief time and leave with a far higher pension. In the latest case, the worker can take a temporary spot, drawing the higher pay that will increase a pension.

In 2012, the governor and lawmakers adopted a mild set of pension fixes that included a ban on spiking. But the members of the California Public Employees’ Retirement System are on the verge of ignoring that change.

A committee of the full board on Tuesday approved 99 special payments that can be counted toward pension calculations. The extra-pay qualifiers run the gamut from pouring asphalt to working the circulation desk at a library. Some sound acceptable, while others invite doubt: Why the extra pay for basic duties?

But the end run around pension spiking is the worst in the batch. It’s so flagrant that the governor sent a letter to the board, composed of labor representatives and a sprinkling of officeholders and their designees. Changing the rules “would improperly allow temporary pay resulting from short-term promotions to count towards workers’ pensions.”

The Press Democrat:

CalPERS says the proposal in front of the board is simply an interpretation of the 2012 pension reform law. From our perspective, it’s less an interpretation than a flight of fancy.

For anyone hired after Jan. 1, 2013, the law says salary is supposed to be “the normal monthly rate of pay or base pay.” That seems quite straightforward. CalPERS, however, proposes to add 99 types of pay to the definition of salary. Many of them seem like payments for routine job requirements. Premiums for working on a library reference desk? Physical fitness and marksmanship for cops? Mixing tar for roofs and sidewalks? Finishing concrete? Taking shorthand? Running audio-visual equipment?

If public employers don’t want pensions boosted by these premiums, CalPERS board members and union officials say they can address it at the bargaining table.

Yes, they could. But it’s already addressed in state law. Doesn’t that apply to CalPERS?

U-T San Diego:

In 2012, Gov. Jerry Brown signed into law a pension-reform measure that appeared to be the real deal. Brown said it would sharply cut costs by reducing pensions for new government hires and by ending public employees’ ability to legally spike their pensions higher. The law also appeared to commit government agencies in California to move toward a system in which taxpayers and public employees roughly shared pension costs.

Two years later, some of these key promises look like a bait and switch. A law signed in June to beef up funding for the beleaguered California State Teachers’ Retirement System sharply increases the imbalance between what taxpayers pay and what teachers pay toward their pensions. And Wednesday, the board of the California Public Employees’ Retirement System is expected to adopt regulations giving public employees 99 different ways to sweeten their pensions above their base pay.

Some of these bonuses are ridiculous, such as giving library workers higher pensions if they regularly deal with the public and giving vehicle maintenance workers higher pensions if they install heavy tires.

Yet the governor only objects to one particularly egregious sweetener in which a temporary assignment to a better-paid job juices a state worker’s pension for his entire retirement.

This isn’t what Jerry Brown said would happen in 2012 — not by a mile.

Yeaaaaaaah, I’m not seeing anybody but the unions and the Calpers board (in majority) defending this.

I guess I’ll find out tomorrow if they passed this.


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