Here are some facts Jetmeck about California and their union loving ways. Why we are in massive trouble and not even close to fixing it.
While the Big Branch and Gulf Coast tragedies certainly warrant investigation, the real question is why a pension fund like CalPERS, whose payments are guaranteed by taxpayer dollars, is using public money to push its political agenda. This question should be especially pronounced in light of a recently released Stanford Institute for Economic Policy Research study, which reveals that CalPERS, along with the CalSTRS and the University of California Retirement System (UCRS), lost a staggering $109.7 billion between June 2008 and June 2009.
As the Stanford study revealed, California's public pension funds are under-funded by a stated amount of $55.4 billion ($38.6 billion of which comes from CalPERS), but their actual shortfall is likely closer to $425 billion
. The discrepancy is due to the fact that public pension funds discount future liabilities (what they will pay to retirees) at the rate that they expect to earn on investments, which is inherently uncertain. Under California law public pension benefits are guaranteed (i.e., risk free like Treasuries), meaning they should be discounted at a lesser risk free rate, rather than the current rate of 7.75%--an amount that is far from guaranteed
, as the depletion of equity during the financial crisis demonstrated.
From the article on all 3 public employee retirement funds:
As mentioned earlier, the pressing nature of California pension shortfalls is due in part to the losses CalPERS, CalSTRS, and UCRS sustained in the markets over the past 18 months. CalPERS expects an average annual investment return of 7.75 percent, CalSTRS targets 8.00 percent, and UCRS expects 7.50 percent.”
Those expected rates of return are simply too optimistic. These funds are expecting 7.5 to 8 percent annual returns in a market that is giving 0 percent rates to savings accounts and 4 percent for 30 year fixed government debt. Instead of realigning to this low yield environment fund managers went all in to the market and gambled on Wall Street:
See the link for figure 6 of the great graph and remember, who cares that they lost 25% as they are guaranteed up to 7.50 to 8% in positive returns!
Here you go with Police officers, who are supposed to good citizens and look out for one another including the taxpayers. Seems they look out for themselves in a Top 10 safest city in America (Irvine) and read along and compare to Anaheim which is probably the 2nd unsafest city in OC:
The Irvine Police Department
has the county's highest disability retirement rate for a large citysince the department was created in 1975. Sixty of 99 officers who have retired since the department was formed claimed to be injured or ill. Crime statistics show Irvine to be one of the safest cities in the nation. Compare Irvine to Anaheim, which has more violent crime but a disability retirement rate of only 15 percent since the department joined the PERS system in 1950.
Small police departments show a higher ratio of disability retirements, in large part because they have less room to provide light duty for injured or ill workers. Buena Park police, with 93 sworn officers, had a disability ratio of 62 percent over the last 5 ½ years – five of eight officers retiring took disability. The La Habra Police Department
, with 63 sworn officers, was at 47 percent for the same period – nine of 19 sought disability.
Anaheim's police department
– one of the largest in Orange County – had the lowest disability rate over the last 5 ½ years at 2 percent. Anaheim assigns injured or ill officers to permanent soft duty as a way to reduce medical retirements. Also ranking low for disability retirements was the O.C. Sheriffs Department
, with 9 percent disability retirement over the last 5 ½ years. Officials said the sheriff's agency is large enough to temporarily reassign injured workers to limited duty, such as guarding the courthouse.
"Get your OVERTIME HEEERRE! Come on over for overtime!"
Database: 2009 O.C. firefighter pay averages $131,000
By SALVADOR HERNANDEZ / THE ORANGE COUNTY REGISTER
Overtime in the county's largest firefighting agency decreased by more than $3 million last year, a savings Orange County Fire Authority officials attribute to the fact there were no major brushfires in 2009.
But with a growing number of empty firefighting positions at the agency and the need to staff stations 24 hours a day, seven days a week, officials expect overtime costs to climb.
Firefighters mop up a vegetation fire in Brea Canyon last month.
BRUCE CHAMBERS, THE ORANGE COUNTY REGISTERMORE PHOTOS »
Though firefighters with the OCFA earn an average base salary of $84,000, the average overall earnings for a firefighter in the agency is $131,522 in 2009, records show.
Add in the vacation pay they stack up and then get paid on the backend of it instead of when they earned their vacation pay. Big difference of not using 10 weeks of vacation pay when making $50k then to let them bank it and pay it out when they are making $89k near retirement (or more with all the free overtime they get).