By Dave Low
Monday morning quarterbacking by Jack Dolan of the Los Angeles Times and Judy Lin of CalMatters (“The Pension Gap,” Sunday Los Angeles Times, 9/18) paints a dishonest picture of the past, present, and future of the challenges facing the state’s pension system.
Public servants who teach our children, protect our streets and save our homes from fires receive an average retirement benefit for a CalPERS about $31,500 per year. Compare this to the excessive bailouts and golden parachutes reserved for super-rich, who are the political driving force behind efforts to slash the retirement security of working families.
Also missing from simplistic and inaccurate measurement of the retirement security of public workers is that many, including every California teacher — do not receive ANY Social Security benefits. Their pension is all they have.
Less than two percent of all pension recipients in this state receive $100,000 or more. Most are City Managers, School Superintendents and other top management bosses, not rank-and-file workers. Most public employees earn salaries that are below their private sector counterparts, and are not eligible for stock options or other amenities offered by tech companies today.
California’s public employees pay into their retirement accounts and in hundreds of jurisdictions across the state they are ponying up more of their paychecks to receive the retirement security they negotiated for in good faith.
Dolan and Lin cynically crop the picture by focusing on a few years of low returns — without mentioning the long-term health of CalPERS and its outstanding returns that exceed 7 percent over the past 30 years. No financial advisor would recommend making financial decisions based on short-term returns; our public pensions shouldn’t either.
No economist was able to predict the Great Recession with the type of accuracy suggested; to cherry-pick the comments of a few economists and elected officials from transcripts 17 years ago may make for good copy, but it is grossly unfair. Take any 10-year period that does not include the Great Recession and the performance of the state’s pension systems typically will exceed those of private markets.
What also is lost in this article is that fewer and fewer California workers will have the retirement security they deserve. Is the answer to slash benefits for more Californians? How will that help our state’s teacher shortage? How will that help us retain and attract public employees who see higher pay and benefits in the private sector?
Private equity markets managed by Wall Street, and the more costly 401k’s that critics offer as an alternative to public pensions, not only lost trillions of dollars during the Great Recession, many of the managers of these funds still made millions betting against the American public. Throwing everyone to the wolves of Wall Street is not a solution. A better alternative is to provide every worker with a safe and secure retirement after a career of service.
We believe that every Californian deserves a secure retirement. That is exactly why we have been proud backers of the Secure Choice program, which will ensure basic retirement benefits for all workers.
Lastly, what is particularly troubling are the sources the writers use to make their case. They mention Dan Pellissier as an Assembly aide, without noting his involvement with Gov. Arnold Schwarzenegger to rob widows of slain police officers of their death and disability benefits in their failed 2005 pension ballot measure and his current five-figure pension.
They also quote former Assemblymember Joe Nation, listing his affiliation with Stanford University. Yet they fail to note that Mr. Nation derives his salary from his work with David Crane, another Schwarzenegger advisor and Wall Street investor who is major contributor to anti-pension causes and candidates, and also a financier of the “nonprofit” CalMatters (Many other CalMatters’ top donors and Board members are contributors to anti-union causes and candidates).
At a minimum, readers deserve this transparency so they can put this attack on the retirement security of millions of Californians into perspective.