Public pensions bear no risk when yields are low
Missing from Mattson Austin’s letter to the editor, “Pension article evidence of lack of knowledge” (Readers’ Forum, July 26), is Austin’s complete lack of knowledge of how other defined benefit pension systems work.
While he is correct that a 7.5 percent actuarial assumption is commonplace, he neglects to mention that the other types of defined benefit pension plans, single-employer and private union pensions, have the ability to reduce benefit levels if assumptions are not met.
This allows those plans to be more aggressive than public plans that cannot reduce any benefits — even those accruing in the future.
Public plans are using earnings assumptions as high, or higher, than private defined benefit plans, resulting in huge required taxpayer contributions when these assumptions are not met.
Mr. Austin speaks of the “substantial” 8 percent of gross pay that public employees pay, yet he fails to mention the amount of taxpayer-required contributions.
The county-required taxpayer contribution is 26.5 percent of payroll and the city of San Rafael a whopping 61 percent of payroll. These staggering required taxpayer contributions have resulted in reduced public services and higher taxes in the county, state and nation.
Even more troublesome is the fact that public pensions throughout California spent all of the investment gains from the 1990s by increasing pension benefits across the board by about 40 percent in 2004.
They are therefore spending all of the gains when investment returns are strong and requiring taxpayers to pony up when returns are weak.
It is no wonder public plans use these ridiculously high assumptions — they bear no risk if assumptions are not met and are rewarded hugely if assumptions exceed.
— Bob Bunnell, Kentfield Citizens for Sustainable Pension Plans
Did letter writer miss more than just the flag?
Lynn Merlo’s letter of July 28, in which she writes — “Funny, I didn’t notice a single American flag on the podium at the Democratic Convention Monday night!” — prompts a question and an observation:
Why publish an insinuating trifle such as that?
Perhaps if Ms. Merlo had spent more quality time hearing the sounds of rich and varied voices (and granted, there could and should have been more), studying an array of distinctly American faces, listening to a pretty healthy sampling of eager, urgent, insistent, angry, proud and passionate words and ideas emanating from the podium that night, she might not have missed the piece of broadcloth so much and rather relished the sight and sound of those things “for which it stands.”
— Tom Lippi, Novato
Oppose ‘dangerous’ bill designed to suppress BDS
A dangerous bill may soon become law unless there is significant pushback. I speak of AB 2844, a bill designed from the start to suppress the BDS (boycott, divestment, sanctions) movement against Israel. The aim of the movement is to put economic and moral pressure on Israel to respect Palestinian rights and international law.
AB 2844, blatantly unconstitutional as originally written, has been amended a number of times to try to make it pass constitutional muster while advancing its goal.
Now AB 2844 is tied to existing laws preventing discrimination in the workplace and housing, as if criticism of Israel’s policies were somehow anti-Semitic. Under penalty of perjury (a felony), businesses wanting to contract with the government would have to certify that they are not only complying with state laws against discrimination, but that “any policy that they have against any sovereign nation or peoples recognized by the government of the United States, including, but not limited to, the nation and people of Israel, is not used as a pretext for discrimination.”
Do we really want our Legislature to spend time and money trying to shield a foreign government from boycotts? According to the Supreme Court, boycotts are a free-speech right deserving of the highest level of protection.
Our Assemblyman, Marc Levine, is a principal co-author of AB 2844. Do we want to re-elect someone who is willing to undermine our constitutional rights for the sake of Israel?
The Senate Appropriations Committee will consider this bill on Monday, Aug. 1. Our senator, Mike McGuire, sits on that committee. Let him know what you think.
— Esther Riley, Fairfax
