Coaltion Working to Protect Secure Retirements Reacts to Governor's OPEB Commission

FOR IMMEDIATE RELEASE:
Tuesday, February 20th, 2007

CONTACT:

Ryan Rauzon (916) 599-2911
Brian Green (916) 524-9837


COALITION WORKING TO PROTECT SECURE RETIREMENTS REACTS TO ANNOUNCEMENT OF

GOVERNOR SCHWARZENEGGER’S OPEB COMMISSION

(SACRAMENTO) – A coalition representing California’s teachers, nurses, peace officers, firefighters and other public employees said today that the announcement of those who will make up the Public Employee Post-Employment Benefits Commission marks an initial step in the right direction towards the protection of the hard-earned retirement and health benefits of California’s public workers.

“We believe that the make-up of the Commission – as was announced today – is relatively balanced, with both management and labor interests represented,” said Dave Low, Spokesman for Californians for Health Care and Retirement Security (CHCRS), and an appointee to the OPEB Commission. “I am confident that my fellow Commission members and I can work together to debunk the myth that the pension system for our police, teachers, firefighters and others who serve the public is in crisis, when, in reality, the facts reveal that California’s public pension system is fundamentally sound.”

“We hope that all members of the Commission will use this opportunity to give a fair hearing to all sides on the public pension issue,” said Ron Cottingham, President of the Peace Officers Research Association of California, and also a member of the OPEB Commission. “We welcome proposals for genuine reform of the state’s public pension system, but we will strongly remind all parties involved that retirement costs in California are not to blame for the budget woes of government.”

CHCRS coalition members are concerned that some politicians – in and out of public office – are continuing to place the fiscal troubles of state and local governments at the feet of California’s public pensioners, insisting that an alleged “crisis” in public pension funding justifies replacing a secure retirement program with a risky investment gamble. But recent figures from both the California Public Employees’ Retirement System (CalPERS) and the California State Teachers’ Retirement System (CalSTRS) have both seen steady improvement since 2003, with both funds rapidly approaching 90 percent funding, higher than they were before the stock boom of the 1990s. Virtually all of the local, independent pension funds have become fiscally stronger over the last several years, as well

Additionally, the assets of CalPERS have almost doubled over the last decade and are at a record high of almost $230 billion. Approximately 75 percent of what the fund pays in benefits are generated by the investments, with employees and employers sharing responsibility for the rest.

And when you look at the percentage of public dollars that go to funding security, said Low, the picture is equally good, and CalPERS employers pay no more today than they did 25 years ago.

“California’s system of providing retirement security for our hard-working public employees has worked for years – and it is working now,” added Low. “It is a low-cost, well-managed system that allows California to recruit and retain good public employees, while keeping the promise made to them for a secure, fair and well-earned retirement.

“I urge my fellow Commission members to keep that in mind as we move forward to address these important public funding issues.”

One of the topics the Governor has charged the Commission to consider over the next few months will be the impact of new, nation-wide accounting rules – imposed in 2006-by the Governmental Accounting Standards Board (GASB). These new accounting “standards” call for state and local governments to calculate and report the long-term costs of retiree health insurance. While CHCRS expects some politicians to use those figures to justify a negative change in the way government provides health benefits for its retirees, the Coalition believes that any reforms should begin with tacking the skyrocketing cost of health care for every Californian, and not break the promises made to hard-working public employees by eliminating their health benefits.



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