What if, two years from now, the County of Los Angeles decreed that you could keep the pension benefits you had accrued, but the level would be frozen for the rest of your career? Or that you would have to pay 30 percent of your salary to continue to accrue future service time?
For more than 60 years the California Supreme Court has consistently held that, under the contract clause of the state Constitution, public employees are entitled for the duration of their employment to the pension formulas that were in place when they were hired. This is known as the California rule. Any reduction to a pension formula during employment must offer a benefit of equal or greater value.
But this rule, and public pensions, have been under constant attack for the past decade and blamed for every imaginable ill and financial problem in government. The mantra is that we would have the money to fix potholes and keep parks open if not for those awful public employee pensions. A recent Los Angeles Times editorial urged rejection of a miniscule 2 percent annual raise for LAPD officers on the grounds that it would increase pension costs, ignoring the fact that the LAFPP fund is 86.6 percent funded and growing.
The threat to public pensions has never been greater; a trio are seeking to place a measure on the 2016 ballot to change the California Constitution and remove public employees from the protection of the contract clause. They are termed-out San Jose Mayor Chuck Reed; failed mayoral and congressional candidate/ talk show host Carl DeMaio; and the head of the Ventura Taxpayer Association, Dave Grau.
Former Mayor Reed managed to pass a “pension reform” measure in San Jose in a low-turnout election, but major parts of it have been put on hold by court rulings based on the “California rule”. Nevertheless, fallout from the election saw San Jose police ranks plunge from the authorized 1,400 to just 800, as police officers fled for other departments rather than wait for court rulings.
It seems that Reed, Grau, DeMaio and their ideological cronies want public employees to share the same meager retirement options of most private-sector Americans, who have seen their pensions taken away and replaced with a failed system known as the 401k. A recent article about what it takes to retire is an eye-opener on the system’s failure. The median 401k account holds just $18,000; among those aged 55-64 and on the cusp of retirement, the savings was a paltry $76,000. It’s no wonder that a 2014 Wells Fargo survey found one-third of all Americans, and one-half of Americans in their 50s, intended to work until their 80s because they did not have money for retirement. Our pension plan, funded by employee and employer contributions and investment returns, has been in existence for almost 80 years. It is a model for a dignified and secure retirement, as opposed to a 401k.
Pensions are worth fighting for because they provide a dignified and secure retirement while delivering a benefit to the public by ensuring a stable and career work force. Eliminating pensions, by contrast, leads to high employee turnover and the decimation of a career work force. In Alaska, public safety employees who were hired after the state stopped pensions for new workers in 2006 remain on board an average of just three years. (Never mind that the promised savings from ending pensions did not materialize – we will save that for another blog.)
The good news is that anti-pension measures have been defeated in recent years, notably in Phoenix and Cincinnati. Defeating these measures took public employee groups and elected officials joining together to educate the public about pensions. We at ADDA are going to engage in this fight – by regularly educating our members so you can educate your family, friends and neighbors and by joining other public safety employee groups to mobilize against this initiative. We will continue to voice our opinions publicly, both to the media and elected officials. If you want to learn more now about pensions and get the facts, please visit a great website called Let’s Talk Pensions run by Californians for Retirement Security, a coalition of more than 1.6 million Californians representing public employees and retirees. Stay tuned.
The Association of Deputy District Attorneys (ADDA) is the collective bargaining agent and represents nearly 1,000 Deputy District Attorneys who work for the County of Los Angeles.