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PENSION ISSUE BALLOONS WITH SOURING COSTS

PENSION ISSUE BALLOONS WITH SOURING COSTS. By Maria Campos, Becky Wong, and Suzanne Lo. Overhauling State and Local Pensions. Gov. Schwarzenegger will not sign bill if there’s no pension reform and budget reform. Schwarzenegger has made pension reform a priority of his final year in office.

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PENSION ISSUE BALLOONS WITH SOURING COSTS

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  1. PENSION ISSUE BALLOONS WITH SOURING COSTS By Maria Campos, Becky Wong, and Suzanne Lo

  2. Overhauling State and Local Pensions • Gov. Schwarzenegger will not sign bill if there’s no pension reform and budget reform. • Schwarzenegger has made pension reform a priority of his final year in office. • Why? The pension system's unfunded liabilities endanger the state's long-term fiscal health.

  3. CALIFORNIA’S FISCAL OUTLOOK: THE 2011-12 BUDGET • Our forecast of California’s General Fund revenues and expenditures • $25.4 billion between now and the time the Legislature enacts a 2011‑12 state budget plan. • $6 billion projected deficit for 2010‑11 and a $19 billion gap between projected revenues and spending in 2011‑12. • Similar to our forecast of one year ago, we project annual budget problems of about $20 billion each year through 2015‑16.

  4. CA committee defeats pension reform bill SB919-June 14, 2010 • A Senate committee has defeated a bill backed by Gov. Arnold Schwarzenegger that would have cut California's long-term pension costs by reducing benefits for newly hired state employees.Sen. Dennis Hollingsworth's bill would have required new state employees to pay more toward their retirement. Most would have to work 10 years longer, until age 65, to be eligible for retirement benefits.Hollingsworth says his bill would have saved the state $110 billion over 30 years.The bill, SB919, failed on a party-line vote in the Public Employment and Retirement Committee Monday.

  5. CALIFORNIA BUDGET DEFICIT MAY SWELL TO $25.4 BILLION IN NEXT 19 MONTHS • By Michael B. Marois - Nov 10, 2010 • http://www.bloomberg.com/news/2010-11-10/california-gap-may-reach-25-4-billion-over-19-months-fiscal-analyst-says.html • The deficit includes $6.1 billion in the current fiscal year, and about $19 billion the next year—Legislative Analyst’s Office • address fundamental public-sector goals -- rebuilding aging infrastructure, addressing massive retirement liabilities, maintaining service levels of high-priority government programs and improving the state’s tax system

  6. Longer–Term Budget and Pension Changes. • Decrease pension benefits for state employees hired in the future. • a measure on a future state ballot that is intended to stabilize state finances in the future by increasing amounts deposited to the state’s rainy–day fund in certain years.

  7. Longer–Term Reforms • Reductions in Pension Benefits for Future State Employees • a measure to reduce pension benefits for newly hired state employees. • the measure sets benefit levels for future employees at levels that were in place for employees prior to 1999. • all future state employees would have their pension benefits calculated based on their highest average annual pay over any consecutive three years of employment, not the one–year period applicable for some current state employees

  8. L.A. TimesOct. 27, 2010 • Villaraigosa asks council to cut health and pension benefits for new workers • civilian employees --increased retirement age eligibility, from 55 to 62; • a reduction in maximum pension benefit from the current level of 100% of salary (after 46.3 years) to a proposed 75% (after 37.5 years); • an increase in employee pension contributions from 7% to 9% of salaries; • 2% contribution for retiree healthcare costs (employees currently pay nothing.) • eliminate retiree healthcare coverage for a pensioner’s spouse or partner

  9. THE ANSWER TO RETIREE MESS? NOT 401(K)S • While developing civilian pension reform proposals, the city of Los Angeles compared the costs of defined benefit/pension plans versus defined contribution/401(k) plans versus hybrids that combine both. • Guess what? Pensions were the cheapest option. • Here's what Consulting company Segal found: • L.A. currently pays $8,988 per employee for retirement. • A 401(k) style plan would cost the city $4,635 per employee. • A hybrid plan would cost $5,197 per employee. • A reformed pension plan would cost $2,273 per employee

  10. VOTERS IN EIGHT OF NINE CALIFORNIA CITIES AND COUNTIES APPROVED BALLOT MEASURES SLASHING PUBLIC PENSION BENEFITS • Menlo Park, Carlsbad, San Jose, Redding, Riverside, Bakersfield and Pacific Grove approved ballot measures reducing public pension benefits for new hires. • In San Diego, voters rejected a half-cent hike in the sales tax that would have prevented budget cuts in police and fire services. The city pension fund, in which public safety employees are included, faces a $2.1 billion deficit that is driving San Diego's budget crisis. • The lone exception in the state was labor-friendly San Francisco, where voters rejected a ballot measure to boost pension contributions from city workers.Read more: http://www.sacbee.com/2010/11/07/3166128/election-adds-pressure-to-change.html#ixzz15KNdi4Qw

  11. GODZILLAPERS AND PENSION REFORM ADDRESS FROM GOVERNOR. http://www.youtube.com/watch?v=T2WxwKcCkNY http://www.youtube.com/watch?v=Z_pQ4LV3xGg

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