Pension Issue Update

The protection of secure pensions for current and future County professional employees remains one of CAPE’s highest priorities. Debate on the issue continues in many different venues and in many different directions.

The legislative front: To help sort through the ever-changing political landscape, the CAPE Board of Directors recently retained the services of veteran Sacramento lobbyist Timothy H.B. Yaryan. Mr. Yaryan already represents the across-the-board interests of the Association of Los Angeles Deputy Sheriffs (ALADS), the Los Angeles Police Protective League, the L.A. County Probation Officers Association and the Riverside Deputy Sheriffs Association, among many others. His arrangement with CAPE is limited to pension reform issues.

CAPE’s presence in Sacramento could not surface at a more important time. During the month of May, the Governor’s 12-point pension reform legislative reform package was reviewed by the joint Senate and Assembly Public Employee Retirement policy committee. None of the measures were officially passed by the committees. Nevertheless, leadership in both houses on both sides of the partisan isle committed themselves to adopting public employee pension reforms later in the legislative session.

Sponsors suspend efforts on one ballot measure, another qualifies for petition circulation: One of the ballot measure proposals at the forefront of discussion among reform advocates earlier this year failed to qualify for the June or November 2012 Election ballot.

With that one out of the way, another pension reform ballot measure was submitted to the Attorney General’s office in April and is now in petition circulation. That measure would require state and local government agencies to implement a “hybrid” pension option for public employees. Sponsors argue that “hybrid” pensions – those that include 401(k) style retirement plans – are “less risky”. They are correct on that point – they are less risky – but implementing those plans actually costs government agencies more because current and new employees are not making contributions into the regular, defined benefit pension programs, which meansgovernment must pay more.

The newest pension reform ballot measure is not likely to secure widespread support and the financial backing necessary to gather the nearly one million signatures necessary to qualify for the November ballot. Nevertheless, CAPE and the other public employee associations involved in Californians for Retirement Security (CRS) are monitoring the measure’s status.

More attempts to secure placement of a pension reform initiative on the November ballot may still come up, but with an August deadline to qualify, their success is doubtful.

Public employees face challenges at the negotiations table: From Alturas to Zamora, California public employees are scrambling to protect hard-won pay and benefits, even in jurisdictions where no financial imperative exists. In San Jose and San Diego, voters approved public employee pension reforms at the ballot box on June 5th. Everywhere they can, it seems, local government leaders are extracting concessions from public employees, unfortunately, because it’s popular.

How long can we expect this fashionable labor-bashing to continue? The anti-public employee environment faced by California bargaining unit representatives at our negotiations tables will continue until finance directors are forced to admit that they have cash on hand to pay the government’s bills and set aside healthy reserves. That point includes governments at all levels, especially the State of California, where the bad budget news just keeps coming.

CAPE’s Position — Uphold local control, and don’t fix what is not broken: Since the debate over pension reform began, CAPE representatives have held a consistent position — don’t try to fix what isn’t broken; and let local governments decide what pension provisions are most appropriate for them.

In Sacramento, the County Hall of Administration, and in sessions throughout the County, CAPE representatives have held that simple line. We don’t need a Sacramento-style fix on problems we don’t have. Broad-brush reforms are likely to cause more problems than they fix. As an independent pension system, our own LACERA operates perfectly fine and suffers from none of the imbalances so often cited by the press and Sacramento gadflies. CAPE’s priority will continue to be to make sure our statewide leaders avoid negatively impacting our pension security