Posted by Tina
We’ve known the city of Stockton, California is banckrupt for some time but now a federal judge has issued a preliminary ruling in banckruptcy court that will cause a lot of upset with Calpers pensioners, and government pensioners nation wide. The American Thinker reports:
Calpers had argued that if Stockton stopped making payments and dropped out of the state pension system, the lien would let it claim $1.6 billion of its assets. But Judge Klein said those statutory powers were suspended once a California city received federal bankruptcy protection.
“Why should I take that lien seriously?” he asked a lawyer for Calpers, Michael Gearin. “I may avoid it as a black-letter matter of bankruptcy law,” he said, referring to well-established legal principles.
He did not dispute that Stockton would be billed $1.6 billion to leave Calpers and said such a termination fee “can be seen as a golden handcuff.” But in bankruptcy, he said, Stockton could legally refuse to pay the bill because it arose from the city’s contract with Calpers, and contracts are broken routinely in bankruptcy.
“The bankruptcy code provides that the lien can be avoided and be treated as an unsecured claim,” Judge Klein said.
The judge will make his final ruling on October 30th. Watch for exploding heads around pumpkin time!
Government pensions have been too liberal…to generous. Rather than following common sense in planning retirement plans our representatives have built retirement plans by collusion for votes and on the notion that the government can afford it. But the government does not pay the bill; the taxpayer pays. Our representatives in government haven’t been accountable to the people for a long long time. Instead they are beholding to the government workers who support their return to power. Greed couched in a sense of entitlement justifies the excess. Unfortunately, many years later the system is bankrupting cities and creating unfunded liabilities that require new methods and means of taxation. The vicious circle becomes complete when high taxation acts as a drag on the economy. This year California imposed another $.68 per gallon on gasoline. What more will they ask Californians to pay so they can retire with pensions that are much higher than the average private sector taxpayer’s pension and a heck of a lot more than Social Security provides?
No!
I am receiving a SS check for a program I was forced to pay into and not allowed to opt out of during my entire working life.
I also paid into my own and my employees pension plans and the employer portion of the SS and MCare over almost three decades.
So don’t even try to hang that baseless charge on me Dewey.
Everyone knows that government pensions, like many union pensions, have been way too generous at the expense of taxpayers or companies bottom lines.
In the case of the government pensions the taxpayer doesn’t even have a seat at the bargaining table. They would call that collusion in other circles.
In the case of businesses, like GM, the taxpayer once again took the hit when the pension/healthcare pushed the company to bankruptcy and it was deemed by our government as “too big to fail” (Total BS) The company could have, and should have, gone through bankruptcy. We bailed out GM to give more power (stock interest) to the unions, save their benefits, and stick it to the bond holders that had invested to try to “save” the company. Once again the taxpayer did not have a seat in negotiating that decision.
It’s time for these greedy people to pay the piper.
There are a number of situations in which top level employees are simply paid too much and in turn their retirements are too high. We hear about them all the time. The City of Bell became famous when city employees gave themselves lavish salaries and retirement benefits. This kind of corruption is more the exception than the rule. We just read about it more because it’s big news, so it seems more rampant.
Then there are the cases of double dippers making 6 figures in retirement. This is legal, but it allows the individual take receive extremely high retirements and it needs to be reigned in. Typically these double dippers were administrators who retire from one state job and take another, sometimes as a consultant for their old job. This really needs to be fixed.
One area where we see pretty hefty (questionable) salaries is in the UC system. Many people feel those teacher wages are too high. They argue there is too much administrative overhead and they too have inflated salaries.
This could be easily fixed if the legislature did some fact finding and adjusted salary and benefit packages to a national standard that takes into account cost of living.
Another situation is city and state employees that spike their incomes with overtime in their last year before retirement in order to get a much higher retirement.
All these things need to be fixed. I’ve heard that single year income spiking has already been fixed and that it now its takes a 3 year average that determine final compensation.
The average monthly service retirement allowance for all retirees is $2,629 now with an average years of service of 20.5.
CALPERS is generally a pretty well run retirement and because of prudent investments they actually fund about 78% of the retirement cost and contributions make up the rest. If other state agencies were run this well we would be doing pretty good.
So, yes, there are abuses. But, on the grand scale most CAL retirees are not pillaging the taxpayers. We read about the abuses and the perception is it’s just a big rip off, but in reality this is limited and it’s fiscal impact on the State coffers is modest compare to the billions the legislature blows on stupid stuff.
I agree the greedy abusers ought to be stopped, but thankfully those folks are relatively few in number.
The UC salary is in need of reform, so are some State jobs, including law enforcement, but on the whole they are doing pretty good in paying fair salaries for the work done.
Note: CALPERS retirees will see their retirement income shrink slowly over time due to inadequate COLA adjustments. The longer they are in retirement the less they get. This will eventually reduce their retirement compensation by 25% and then it bottoms out and goes no lower. But, that’s a pretty big hit from where they started!
in 2011 Union Watch posted this report:
I didn’t look for a more current report but 2011 isn’t that long ago. Part of the problem is the sheer size of the bureaucracy.