March 9, 2007

The pension commission

The commission Gov. Arnold Schwarzenegger and legislative leaders appointed to look at pension and retiree health benefits had its first meeting today. It was mostly cordial with only a slight note of the obvious underlying tension present -- until Marcia Fritz arrived. Fritz is a Sacramento-area CPA and pension expert who has been dogging the issue for years. She is currently working with former Assemblyman Keith Richman on a proposal, perhaps to one day be a ballot measure, that would set 65 as the age at which future California public employee hires could retire with full benefits. Public safety workers would get full benefits at 55, and only the disabled would get health benefits if they retired early. According to Fritz, the idea is to model it off the rules that now govern Social Security and Medicare, although it sounds as if some of the details, especially on the health care side, are still in flux.

Richman, of course, was the author of the ill-fated pension proposal that Schwarzenegger endorsed and then abandoned in 2005 after opponents trotted out widows and orphans of dead cops to allege that it would eliminate their benefits. It wouldn't have touched their benefits, since it only applied to future hires, and it likely would have led to an increase in death and disability benefits when all the dust had settled. But the tactic was effective, Schwarzenegger caved and Richman, a moderate to liberal Republican, became the devil to public employee groups.

Fritz's appearance at the commission meeting Friday prompted sharp responses from a couple of organized labor folks on the panel, including Dave Low of the California School Employee Assn., who asserted that the new proposal would leave his sister, who is 58, worked 32 years as a teacher and has a serious case of cancer, with no health benefits. "This hits close to home," Low said.

Other commission members challenged her facts, and one demanded to know who belonged to her organization. Labor reps who followed Fritz to the mike asserted that the proposal was a solution in search of a problem. "There is no crisis," thundered one of them.

The idea of granting full benefits only to those who retire at age 65 hardly seems radical in this day and age. And the labor groups probably know that the notion would sound sensible to most voters. But then, ending guaranteed pensions for public employees and giving them individual retirement accounts instead also had the support of 60 percent of Californians -- until the widows and orphans showed up.

This commission probably has little chance of coming up with a consensus on what to do about public employee pensions and health care benefits. But if it can shed a little more light on the scope of the problem and offer an objective analysis of the alternative solutions, it might be worthwhile.

Posted by dweintraub on March 9, 2007 12:49 PM