Friday, May 18, 2012

Take on Pensions -- Now

There will never be a "right time" to deal with pension liabilities properly.

Unless California employees want to suffer the same fate as Rhode Island, where current pension recipients witnessed their benefits suddenly sliced in half, or worse yet not receive any benefits at all, like the penurious pensioners in Greece, they must give their legislators and governor room to institute much needed reforms.

Governor Brown's ten-point plan is reasonable table of reductions and distributions, none of which differ dramatically from the same concessions which labor unions in other states have made. Everyone needs to contribute something, whereas currently some employees contribute nothing at all. While public employees currently assume no risk for their investment, private employees are risking a great deal through 401-k plans, many of which have loss a great deal of their wealth following the Great Recession.  Increasing demand on state coffers in addition, coupled with unwise credit lending in sub-prime mortgages, has turned infrequent budgeting challenges into unmitigated disasters year and year.

Felons who betray the public trust both morally and financially do not deserve to draw a pension from the state. Currently, teachers charged with perpetrating lewd acts against minors or established committee personnel charged with government oversight have abused their authority and padded their retirement takings at taxpayer expense.

Governor Brown's plan also calls on future employees to retire at 67, not 55, in order to receive a pension. This practice is commensurate with other states.

The public sector unions have drawn on the states' coffers considerably for the past four decades. Flush times have disappeared, yet state employees still demand the same share of benefits which they bargained for from previous administrations.

The expensive entitlements of investing a little and getting much more upon retirement will force very major agency in the state to close if they are not amended as soon as possible. The regulations protecting state funds from review renewed dispersak, the laws which tie lawmakers' hands preventing them from instituting necessary reforms,  and the political action of a minority of lobbyists all threaten the pensions not in demand, and are certain to bankrupt the state so that there is no money to payout to future workers.

We need leadership in Sacramento that will take on pensions, and take them on now, with no fear of political recrimination. Markets, financial growth, and economic recovery will never occur as long as politicians demonstrate fear instead of force, and voters takestock of their own limited needs instead or respecting the greater good of the state.

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