Why are public pension foes still on a tear, raising red flags and trotting out pension boogymen as if this were still 2008?
The question is worth asking since California’s public pension plans are again in good health after weathering the market crash of the Great Recession. All across California, at the state level and in more than 90 local jurisdictions, firefighters, police, teachers and other public employees have worked with government leaders to develop stable and sustainable retirement systems and to ensure they are affordable and fair for taxpayers and retirees. This collaborative effort exemplifies the effectiveness of collective bargaining and the desire of public employees to be part of the solution, not part of the problem.
The results, though not well publicized, have been dramatic. Concessions by public employees through collective bargaining have resulted in a savings in excess of $570 million just in the past two years. Additionally, an upswing in the stock market has led to more stabilized retirement funds throughout the state, though the pension foes would like us to believe otherwise. CalPERS and CalSTRS, the state workers’ and teachers’ pension funds are once again at a 70 percent funding level, a level national rating agencies consider healthy. The L.A. County pension fund, LACERA (Los Angeles County Employees Retirement Association), is in even better shape at 83 percent funded.
Despite these improvements in pension fund stability, pension opponents still claim that pension reform is the solution to our budget problems. They make false claims that taxpayers are responsible for 100 percent of pension funding, even though up to 80 percent is funded through investments and employee contributions. They claim that reducing public employee pensions will resolve budget deficits even though pension costs account for less than 5 percent of most government budgets.
Other pieces of the state budget are far more costly than pension liabilities. Rescinding the vehicle license fee cost $5 billion a year, forcing the state to backfill the lost funding. Another $5.5 billion a year goes to pay off bonds for roads, bridges, schools and the like, infrastructure vital to California’s future. But there is a human infrastructure investment we also must make in the scientists and engineers and planners that keep these projects moving. That investment includes ensuring a decent retirement to attract and keep these valuable workers.
Even the public pension foes admit that such skilled workers can make more money in the private sector than they do working for state and local government. The equalizer has been the lure of job security and a livable pension. Remove that security and you’ll send that skilled public workforce scattering to the private sector where salaries for skilled workers are higher.
Decent pensions, such as those for the families of police officers killed in the line of duty, are especially important. Officers like L.A. County Deputy David March, who was shot and killed on April 29, 2002 during a routine traffic stop. His sudden death left behind a grieving wife and step-daughter. Painful as his death was for his family, Dave did leave them with a small pension reflecting his 7 years as an officer. Without it his family would have had to struggle financially while dealing with his death. His surviving family would have had little had he been forced into a 401k style retirement plan.
"I don't know how my daughter and I would have gotten by financially. We hadn't planned on losing Dave so suddenly," said Dave's widow. Police officers do an honest job for an honest wage. We understand the risks involved with the job, but we face those risks to protect society from harm. We take those risks knowing that our families will be taken care of should we lose our lives serving the public.
But maybe an insecure retirement is the real goal of public pension foes, making public service, which should be an honored pursuit, so dismal that more and more public workers will elect to leave for private sector jobs. A secure retirement should be the goal for everyone, whether in the private sector or public sector. For those who have reached the end of their working years, there should be a real pension that lets you live decently in retirement. For those like Dave March, there should be the security of knowing that their pension system will provide some security for their young families should they be killed in the line of duty.