Dear Editor,
When I served on the City of Milpitas Budget Task Force, six of us worked through most of the significant expenses in the city budget, to locate which costs could be reduced. We received a lot of help from the city staff in response to our endless list of questions. One of our key questions was, “What can be reduced under existing law and what cannot be reduced?”
We learned that it is possible to reduce most costs if city services are also reduced. There was only one significant cost that could not be changed under current laws. The city attorney informed us that pensions for current employees can’t be changed. We also were informed that the current California Public Employees’ Retirement System pension plan could not be replaced with another pension plan unless the current plan was paid up at the same time. Since that would involve funding many millions of dollars that the city does not have, it was impossible to change. When we learned of this, we dropped that idea and moved on.
This morning I opened my Wall Street Journal (Page A17) and learned that CALPERS has been misleading us for many years. The law does not require the city to immediately fund all pension benefits if it decided to use a new plan such as a defined-contribution plan funded with actual contributions (similar to a savings plan).
The article is titled “Pension Reform Doesn’t Mean Higher Taxes” by Andrew Biggs. The city can continue making contributions to the current pension for current and retired employees while doing the same for a second pension plan for new and future employees. This would slowly reduce pension contribution costs until finally all the current employees retire and eventually die and the earned benefits are paid about 75 years from now.
Gee, why would CALPERS mislead us just to avoid ending all their jobs? Why would the CALPERS Board of Directors let that happen? Isn’t the CALPERS board appointed by our politicians to watch over our tax money? It seems they are just watching over the Employee Union Monopoly. I guess folks like you and me will just need to continue watching those scamps. Wouldn’t it be nice to have an unbiased CALPERS board, which isn’t beholden to the Bay Area Municipal Employees Monopoly? What a load of crap. The stuff I shovel up at the horse stables on Piedmont Road and haul to my garden is more righteous than the output of the CALPERS Board of Directors. Maybe that stink in our air is blowing in from Sacramento.
The full text of the article is posted on my blog, dmanassau.blogspot.com.
Dan Manassau Milpitas
