Pension liability: Responsibility calls for having authority

06/12/2014

 

Every day, millions of people across the country invest their hard-earned money in lottery tickets with the hope of the big payout or just a lifetime guarantee of monthly payments; big or small is irrelevant. The security of having stable income for the rest of one’s life is a huge draw. And so it goes with the battle over pension reform and the initiative expected to be on Ventura County voters’ ballots this fall.  


While comparing Lotto tickets to pensions isn’t necessarily fair, the reality is that the Lotto system is much more stable when it comes to payouts, as the money invested is what is paid out. Pensions, on the other hand are a liability, with public employees’ contribution being matched a certain percentage — some pensions are matched dollar for dollar, other entities pay a higher percentage. The County of Ventura has nearly $1 billion in unfunded liabilities, which means, it doesn’t have the money for the pensions it has agreed to pay out.


The Ventura County Taxpayers Association, which led the charge to get the pension initiative on the ballot, and many others see this unfunded liability as a potentially huge burden on taxpayers who had no part in the decision making. So with that, an initiative was created that would require that pensions be phased out and replaced with a 401(k) retirement plan. Proponents of the initiative then went out and collected 40,795 signatures. Last week, the county clerk-recorder estimated 32,260 were valid; the initiative needed 26,000 signatures to make it on the ballot. Shortly after, the Ventura County Board of Supervisors were met with pushback from public employees and their unions, saying they would sue the county if the supervisors placed it on the ballot or did not get a court ruling on its validity. The attorney representing opponents of the measure said it conflicts with state law that governs county retirement systems as well as collective bargaining. Further, it would take away the authority of the Board of Supervisors when it came to negotiating employee contracts.


What seems to be missing in this effort to shut down the move to put this initiative on the ballot, this threat of a lawsuit, is that similar ballot measures were passed with overwhelming support in the cities of San Diego and San Jose. San Diego’s Prop B passed with 65.8 percent of the vote in June 2012. In San Jose, Measure W passed with 72 percent of the vote in November 2010. These measures remain active and legal, though there has been no media coverage on whether they were contested. While those voter-approved initiatives may not have the exact same language as Ventura County’s — and this will be the first county in California to have such an initiative — the idea remains the same: Unfunded liabilities are a huge concern to taxpayers.


While we appreciate the hard work of our public employees, from the sheriff’s office to public works, the Ventura County Medical Center and so forth, we are concerned that this effort is an attempt to stifle the will of the people, the very same people who will have to bear the burden of fulfilling such benefit obligations, one way or another. The Board of Supervisors ordered studies of fiscal and legal impacts of the measure, and to see if it were legal to put on the ballot. We hope the results of these findings will be enough to satiate the opponents of the measure and let the vote go before the people.

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Comments

The problem is that without new money coming in from tax, those already retired after working their lives will not have what they bargained for and counted on. The fund will go broke. This is a sticking point worth consideration as well.

If the study shows that this is not a likely outcome, then the people's will could have merit.

I'm thinking about Enron's unfortunate employees and their retirement funds about now. Privatization is basically theft of the public sphere and usually costs the taxpayer more--military functions, prisons, medical insurance, etc..

posted by cassandra20 on 6/12/14 @ 10:05 a.m.

This makes no sense. Why don't we put corporate subsidies on the ballot? Why aren't taxpayer watchdogs screaming about oil companies and corporations who take our hard-earned tax money? You know why? Because it's easier to target a public servant's benefits.

posted by nomdecrayola on 6/12/14 @ 10:51 a.m.

It is incorrect that the pension system depends on new money. This is akin to a ponzi scheme and the pension system is not a ponzi scheme. The system is designed to be self-funding. What has happened is that the pension fund has not achieved its assumed rate of return - 7.5% per year. The added problem is that there has been a lot of spiking and retirees are living much longer. So the normal cost (now ~$80 million) is not fully funding the system and there is an additional $100 million needed from the taxpayers.

posted by Silverstrand on 6/12/14 @ 09:08 p.m.

This would not be necessary if certain segments of public employment HAD NOT gotten so greedy. But they did and the Board of Supes went along and tax payers got screwed. So booo booo all you want, you got greedy and this is the result.

posted by Scapegoat on 6/13/14 @ 06:51 a.m.

Let the public sector employees pay up and contribute to their retirement just like all of us in the private sector do. If they don't have the discipline to plan for their own future, then let them figure out their own destiny when they retire.

I feel no obligation towards them, they're overpaid and most of them are incompetent anyway. They're basically stealing our money.

By the way, why is it so hard to fire an incompetent state or county worker? What's so special about them?

posted by surfsup on 6/14/14 @ 03:49 p.m.
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