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Issue of the week: Pensions

Published: Monday, Jan. 23, 2012 - 12:00 am | Page 11A

THE ISSUE: On Wednesday, a Senate-Assembly conference committee will convene to consider part of Gov. Jerry Brown's plan to reduce state pension costs. Brown wants to offer hybrid plans to new state employees that would include traditional defined-benefit pensions and 401(k)-style retirement funds.

Last week, we asked readers:

Should lawmakers reduce pension costs by offering hybrid plans to new state workers? Does that change go too far? Or should it be more far-reaching?

Here are some responses:

Pensions do not bust budget

Myths and untruths spread by pension busters have cast a dark cloud over public pensions. Claims that pension costs will bankrupt state government are flat wrong; California's entire contribution to retirement is less than 5 percent of the state budget.

Headlines paint public pensions as the cause of all of the state's problems, and spotlight only the rare cases of abuse. Pension spiking is wrong, but only a small fraction of retirees have pensions above $100,000.

Unlike in the private sector, many public employees do not receive Social Security, making their pensions their sole source of retirement income, other than savings. But fairness requires that workers who have dedicated their careers to public service should be able to retire with dignity.

– Diane Smith, Lincoln

Put all workers in 401(k)

One of the alternatives to Gov. Brown's proposed hybrid approach is to require that all new government employees be placed in a 401(k) pension plan.

I believe that such a plan is the only one that is truly fair for both employees and taxpayers because it is completely transparent.

Taxpayers will know the full pension expense each year while governments will not have the ability to pass pension liabilities onto future generations.

When evaluating initiative proposals related to 401(k) plans for new employees, the Legislative Analyst's Office notes that such a change will not have an impact on government pension costs for 20 or 30 years. While this statement might be true, that is no reason not to change pensions for new government employees now. For those of us who love California, we are willing to wait for the time when California's government employee compensation system is both fair and transparent and covers all government employees.

– Leiv Lea, Woodside

Support an end to spiking

I have worked at a school district for 20 years. I take issue with those who claim public employees live lavishly on fat pensions. Most California public employees are barely getting by on their pensions, which average $2,000 a month. Classified school employees average only $1,193 a month.

California's public workers support laws to stop pension spiking and backed legislation last year – vetoed by then-Gov. Arnold Schwarzenegger – that would have virtually ended the practice. State employees agreed to pay more toward our own pensions to help the state's budget mess.

– Reilene Norris, Sacramento

Look after average workers

I could have retired three years ago, but being single, I wouldn't be able to make my mortgage payments living on my pension. Please consider the average working employee. The pensions we draw are not excessive.

– April Fear, Citrus Heights

Pension debt robs services

Public pension costs are crippling governments across the state. As a member of Sausalito's City Council I see first-hand the challenges of pension pressures on city budgets and services. The government employees that I work with are honest and hardworking public servants and they deserve a fair pension.

Unfortunately politicians have been making promises they can't keep. We simply can't afford to keep digging ourselves deeper in pension debt and robbing other services to pay for unsustainable benefits.

While it is encouraging to see Gov. Brown propose a hybrid pension plan, the Legislature does not appear ready to pass anything substantial. That's why giving voters the option to weigh in on this issue on the ballot is so important, and is exactly what a group of pension reformers in Sacramento are working to do.

– Linda Pfeifer, Sausalito

Benefits help state compete

The real issue that the state faces is how to compete with the private sector for qualified employees in both good and bad economic times. Policies that assume there will always be high unemployment are shortsighted and will not serve the public in the long run. Many state employees, especially in technical and professional positions, earn salaries that are less than comparable positions in the private sector. It is benefits and job stability that make state employment competitive.

Since the state can no longer claim job stability, it is benefits which make up for lower salaries.

Reducing pensions may be emotionally attractive, and may earn legislators some votes in the next election, but it will not address the issue of how to compete with the private sector for skilled workers. It is a simplistic answer to a complicated problem.

– Nancy Bougher, SacramentoWRITE US A LETTER

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