The public-employee pension fight

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Public employees are getting attacked on all fronts, and one of the major issues is pensions. Forum did a show on it this morning, and all the usual suspects were there arguing that the public is outraged, that pensions are out of control, that nobody in the private sector gets these kinds of deals and that high pensions are damaging the very social programs that progressives love. Jeff Adachi, SF's public defender, is making some of the same arguments in his pension-reform proposal.

Let me add a little perspective.

First of all, the majority of the public-sector workers who get pensions in CA don't get huge payouts -- the average pension, SEIU's Terry Brennand pointed out on the show, is a little over $2,000 a month. Teachers get a little more, but they don't get social security; they give up that federal benefit in exchange for pensions that pay maybe $3,000 a month.

There are serious problems with pensions -- and most of them involve two categories of workers: Management employees and public safety. Those $100K-plus pensions? Check em out. In San Francisco, anyway, and I'm sure it's the same in most of the state, the majority of them go to cops, firefighers and people in senior positions who manage to figure out how to bump their pay scales up in their final years.

The bigger cost may be retiree health care -- but that's a bit misleading, too. If we had a single-payer health care system, we wouldn't need to worry about all these retiree health costs busting state and local budgets. And if retired public employees weren't getting health care through a pension system, a lot of them would wind up in the public-health system anyway, through Medicare or Medi-Cal; we, the taxpayers, would be covering that cost anyway.

You want to save money on pensions? Quit giving the cops and prison guards everything they want.

Comments

Mr. Redmond,

You should take the time to study the numbers, in my opinion. People like Jeff Adachi are not "attacking" public employees. As a matter of fact, he is one. The issue is fiscal solvency and how City employee benefits, which are going to increase another $1 billion over the next five years, are going to be paid. Appreciate your perspective though.

Posted by C.J. Roses on Jun. 19, 2010 @ 9:19 am

Tim

The issue isnt whether we'd like to give good pensions to every city worker. It's that we can't afford to. Without a plan to address the massive current unfunded liability for pensions, your lament lacks substance.

And yes, cops, fire crew and senior management get higher pensions. Why? Because they make higher salaries and pension payouts are based on salary.

We need to rejog the entire system to make it sustainable. A defined-contribution system and higher employee contributions would have to be a vital part of that.

Envy between different classes of PS workers should not be part of it.

Posted by TomFoolery on Jun. 19, 2010 @ 9:26 pm

Tim's article misses the point. An attemp to address the problems with massive unfunded pension liabilities isn't an attack on public employees; it's an attempt to prevent the City's balance sheet from leading us to bankruptcy. The City is going to pay over $500 million on pension and health care costs this hear and the numbers are projected to escalate substantially in coming years. That's not sustainable.

I agree that public safety pensions (and salaries) are way too high, but even a pension of $2,000 for the SEIU worker example is more than the average private 401k will return a year. Moreover, that $2,000 is guaranteed (the 401k is not) and the City is on the hook for it.

We can't just keep burying our head in the sand and thinking that the City's pension system isn't a huge problem.

Posted by Patrick on Jun. 20, 2010 @ 12:34 pm

Patrick is absolutely right. Pensions expenses for retired employees are rising about 9% a year. Tax revenues actually dipped last year and are projected to rise no more than 4% a year.

Hence, pension costs are going to keep eating larger shares of tax revenues that should be spent on parks, public health clinics, street cleaning, you name it.

Something has to give.

Please support Jeff Adachi's ballet measure to make public employees cover a portion of their own pension funding.

The alternative is bankruptcy down the road.

Posted by Barton on Jun. 23, 2010 @ 9:14 am

... I agree that public safety pensions (and salaries) are way too high, but even a pension of $2,000 for the SEIU worker example is more than the average private 401k will return a year. ...

You're doing an apples to oranges comparison. Public Sector pensions are IN LIEU OF Social Security, not IN ADDITION to it like a 401K.

Posted by Scott on Jun. 28, 2010 @ 1:00 pm

Much thanks to Tim Redmond for this editorial. As a retired City employee with a $2000 a month pension, I haven't been able to sleep since the Adachi Campaign against us began. Currently I pay $260+ a month for dependent's health insurance. If Adachi gets his way, I will have to pay at least $520--and with health insurance rates going up each year--I can imagine half my income going to health care. A 50% across-the-board payment is regressive. It's part of the Tea Party mentality to blame government workers for the problems of other workers. I would expect our so-called progressives to be a bit more rational in their thinking. Tax those who have a pension of more than $75000 more for their health care. In fact, levy an income tax on all those corporate managers who commute to San Francisco and run back to the suburbs every night. But don't blame the most vulnerable of San Francisco's old people for the problems we face that are caused by corporate greed. Shame on Adachi and Gonzalez.

Posted by Guest Arlene Eisen on Jun. 30, 2010 @ 7:27 am

Tim, you are FACTUALLY INCORRECT when you claim that Adachi's measure takes attacks city employees' health benefits. Currently, the city of SF pays 100% of the city employee health benefits and taxpayers will CONTINUE to do so given Adachi's measure. His measure raises the cost of paying for city employee dependent health care costs by 25%.

You are also FACTUALLY INCORRECT when you insinuate that school teachers would take a hit if Adachi's measure were to pass. Teachers are not considered city employees and fall under the SFUSD so they are entirely EXEMPT from the measure.

Please get your facts straight.

Posted by RCCola on Jul. 13, 2010 @ 11:07 pm

You're incorrect. Employees and retirees do pay part of the health premiums. It's easy to find out: myhss.org for the facts.

The other person who is exempt from even paying into the pension plan is Mr. Adachi himself. He is an elected official. The employees contributions pay for his pension.

Why did a billionare fund this? Approximately $5.00/signature was spent to gather the signatures. Perhaps he's a large stock holder of Blue Cross/Blue Shield. They came in with an enormous rate hike this year that wasn't based on any actuarial fact. They did same thing to the privately insured in CA. Remember? Blue Cross profits have soared! Wish some of you would take your energy to fight that problem. Wish Mr. Adachi would spend more time going after the insurance industry. But he probably can't get a billionaire venture capitalist to fund that.

Posted by SamMax on Jul. 22, 2010 @ 12:34 pm

Currently City non-uniform employees pay 7.5% of their gross pay to the SF Retirement system. Employees hired after January, 2009 pay an additional 2% to a health care trust fund. That’s 9.5% of their pay. With Adatchi’s initiative that will be 11%. Add 31% for fed and state taxes, 6.5% for social security, hundreds for medical contributions and what’s left?
The biggest pension increases in recent years have gone to uniform employees, coincidentally, those who’s jobs protect property and power. They, on the average, receive a pension more than double that of non-uniform employees and they receive that pension much earlier and for a longer time.
Putting the many reform initiatives into context, what we are seeing is the steady grinding toward poverty of the vast majority of working people, whether that be directly through unemployment and asset devaluation (homes, stocks) or collaterally through reductions and outright eliminations of wage and benefits. The last time this happened in the 1930’s there existed a seemingly revolutionary socialist alternative which prompted President Roosevelt to convince enough of the wealthy that they had to transfer much of it to social programs through taxation in ordered to save the system. Today the call is for “no new taxes” and market based solutions.
The trend for working people is to continue to see our economic futures go down the drain while each politician, completes for donations by getting us there faster. The wealthy will continue to become more insecure and demand ever greater personal wealth and privilege because the system, as a system, has outgrown its ability to provide stability, improved quality of life or, even a pension. Its time to stop jealously looking into the next guys plate and find a new way for all to sustainably get enough to eat.

Posted by Sheldon on Jul. 19, 2010 @ 9:39 pm

"His measure raises the cost of paying for city employee dependent health care costs by 25%."

I believe that figure is actually 100%. If you currently pay 25% for a dependent and that payment rises to 50%, the payment doubles -- a 100% increase not a 25% increase. I know you guys love talking numbers, so...

A 100% increase sounds like an attack to me.

Again, if larger budget issues are the focus here then it makes no sense to single out public workers.

Posted by Guest LD on Jul. 20, 2010 @ 9:44 am

As a CA state employee and RN, I am well aware of both the problem of health care expense for public employees and how patient expense impedes many Californians from accessing health care when they need it.
Better for Mr. Adachi to come out publicly for SB 810, the California Universal Health Care Act, now weaving its way through our legislature in Sacramento for the third time, doomed perhaps but the history of Governor Schwarzenneger’s veto the last two times it passed both the CA Assembly and Senate.
SB 810 would reform our current, profit-driven health care delivery system, saving at least 30 cents on every health care dollar for health care instead of mega profits for the insurance, pharmaceutical, medical supply/device corporations and for-profit doctors, hospitals and nursing homes.
SB 810 would dissolve the employment/health care contract that keeps us an indentured labor force working to have health care and falling behind in cost of living wage increases as our insurance premiums go up…in essence subsidizing the health industry with our foregone real wages.
If Mr. Adachi fails to support SB 810, then we will know that the Adachi-Moritz initiative is really a temporary band-aid on the backs of San Francisco city workers instead of the correct treatment that SB 810 offers all Californians.

Sea Star RN

Posted by Guest Sea Star on Aug. 02, 2010 @ 9:53 am