Governor Edmund G. Brown Jr. on Jan. 9 proposed a balanced budget that injects billions of dollars more into schools and health care coverage, holds college tuition flat and delivers on Propositions 1 and 2 by investing in long overdue water projects and saving money, while continuing to chip away at the state’s other long-term liabilities – debt, infrastructure, retiree health care and climate change.
Anne Stausboll, Chief Executive Officer for the California Public Employees’ Retirement System (CalPERS) issued the following statement today in response to the proposed state budget and efforts to reduce health care costs today and in the future:
"Managing and paying for the cost of health care for public employees requires discipline, collaboration and innovation. We applaud the Governor’s wisdom to do what CalPERS and many public employers have done in recent years, tackling the cost of health care and retiree health care," Stausboll said.
It’s official: Gov. Jerry Brown’s January budget proposal will include a plan to reduce the nearly $72 billion in unfunded promises the state has made to pay retiree health benefits.
Now how to pay it? Answer: Money in the rainy day fund that voters approved just last month, Proposition 2. [Read More...]
Retirees covered by financially troubled multiemployer pensions could soon see their benefits cut under a congressional spending deal to keep the government running, the Associated Press (AP) reported Dec. 10.
The plan does not affect public pensions like those under CalPERS, but California State Retirees is closely monitoring this and all other pension issues and trends.
The following article appeared on the Washington Post website regarding a plan that would allow pension plans to cut retiree benefits. The California State Retirees is closely monitoring this legislation, and assessing the impact. We will keep our members apprised as new information becomes available. The article is presented below for your information. California State Retirees
The Washington Post -- A measure that would for the first time allow the benefits of current retirees to be severely cut is set to be attached to a massive spending bill, part of an effort to save some of the nation’s most distressed pension plans.
The rule would alter 40 years of federal law and could affect millions of workers, many of them part of a shrinking corps of middle-income employees in businesses such as trucking, construction and supermarkets.
A new report finds that defined benefit (DB) pension plans are a far more cost-efficient means of providing retirement income as compared to individual defined contribution (DC) accounts. The study calculates that the economic efficiencies embedded in pensions enable these retirement plans to deliver the same retirement income at a 48% lower cost than 401(k)-type DC accounts.
Taking aim again at government pensions, an angry creditor in Stockton’s bankruptcy case is appealing a pivotal court ruling that preserved the city’s retirement plans.
Franklin Templeton Investments filed a notice of appeal this week, challenging the Oct. 30 decision that approved Stockton’s reorganization plan. The plan keeps the pensions fully funded but pays Franklin, which loaned the city $36 million during better economic times, just 12 cents on the dollar.
Max Turchen, a longtime CSR board member and political activist, passed away Oct. 31 at the age of 94. “Max was a tireless champion for the rights of retirees and workers, and he will be sorely missed,” said CSR President Tim Behrens. “He was dedicated, hard working and most importantly – he was a good man.”
CalPERS said Nov. 3 it has received a $249.3 million payment from Bank of America, the result of a settlement over toxic mortgage securities purchased by the pension fund during the housing bubble. With the Bank of America settlement, the California Public Employees’ Retirement System said it has now recovered more than $500 million from its investments in bad mortgage securities.
A bankruptcy judge today approved the city of Stockton’s plan for repaying creditors, a plan to keeps pensions intact despite the objections of a disgruntled investment firm. U.S. Bankruptcy Judge Christopher Klein approved the city’s plan during a two hour hearing in U.S. Bankruptcy Court in Sacramento, rejecting the complaints from San Mateo-based Franklin Templeton Investment over how it is being treated. Franklin, which is getting repaid about 12 cents on the dollar over some bond debts, had argued its treatment was unfair in light of the city’s refusal to reduce pension contributions to CalPERS. [Read More...]