Last year CalPERS reported that the city of Fullerton is facing an unfunded pension liability of $37,531,831 on our public safety employees’ retirement plan. That’s the amount that we currently owe our public servants above and beyond all future budgeted payments.
Of course, many professional actuarials believe that CalPERS’ figures are purposefully understated. They’re just being nice. What we’ve learned over the last few years is that CalPERS and the unions have been feeding our politicians a big fat load of lies, which were used to pump up their pensions. The figures are derived from proven unrealistic investment returns that can never be achieved. Studies conducted by Stanford grads and the NCPA agree.
So we asked an industry insider to recalculate Fullerton’s unfunded pension liability using a realistic rate of return for a government pension system. While he could not do a detailed actuarial report for our city, he stated that using a more realistic 5% long-term rate of return “would raise the unfunded liability by somewhere between 60% to 120% in most pension systems.”
Based on those figures, it’s safe to say that Fullerton’sreal unfunded pension liability is somewhere between $60,000,000 and $83,000,000. That’s just for the police and fire unions, which has about 250 currently employed members.
Wrap your head around that. Sixty million dollars of unfunded, unplanned debt just for our little city of Fullerton. That money will not be spent on roads, parks, infrastructure, libraries or public safety. It will be given away to retired public employees, long after they’ve stopped serving our city.
If we don’t do something about it now, it’s going to get worse.
The other day we challenged retired police chief and $215,000 public pensioner Pat McKinley to put some real meat behind his dubious claim that he will “work to reform public employee pensions.”
Over the weekend we discovered a letter posted to McKinley’s website purporting to declare his position on pension reform. Exciting… until we read it. The letter actually commits to nothing and woefully understates the changes necessary to even begin correcting this problem.
Just say anything
Let’s run through Pat’s suggestions one by one. It’s important to note that McKinley’s letter says pension reform must contain ONLY ONE of the following:
Increase the amount contributed to the plan by Employee Contributions – Necessary, but wholly insufficient. While giving taxpayers some breathing room, demanding employees pay a little bit more does nothing to address the core issue, which is the unsustainable nature of pension guarantees when combined with the power of public employee union lobby. By itself, this change only slightly delays the pain.
Increase the amount contributed to the plan by Employer Contributions – Unbelievable. Increasing employer contributions is another way of saying we should raising taxes to pay for pensions. So now it would be safe to say that Pat McKinley wants to raise your taxes, but it’s really hard to believe he would write anything this dumb. For now, we’ll just assume that he has no idea what he’s talking about.
Slow the accrual of pension benefits by returning the formula to its previous level – Legally a change like this change can only be made for new employees, which would do nothing to address the massive unfunded liability that we have already accrued. Furthermore, it leaves the door wide open for future abuse when the unions become more powerful.
Slow the accrual of pension benefits by increasing the normal retirement age to reflect the longer life expectancies of our City employees – Same problem as above. The commitments we’ve made to current employees cannot be changed without a bankruptcy. The only lever we really have left salary and to a lesser extent, contributions. Cut salaries, raise employee contributions… or go broke.
Slow the payout of retirement benefits by lowering the Cost of Living Adjustment in retirement – The cost of living adjustment is about 2% a year. Reducing that, if it’s even legal in California, is hardly enough to sustain hundreds of public safety employee’s earning 90% of their final year’s pay for the next 30 years. And once again, there’s nothing to prevent another band of RINO’s from reinstating this benefit the next time CalPERS overstates its assets.
So what have we learned? McKinley has thrown out a bunch of half baked ideas to fool you into thinking that he wants pension reform, but it really boils down to almost nothing useful. And of course, even after writing this letter, McKinley has not committed to any pension reform.
Woefully inadequate
We’ll say it again: Taxpayer-funded defined benefit plans must come to an end. The private sector learned long ago that they are completely unsustainable and also unnecessary. All new employees should be given defined contribution plans, while current employees should be made to pay as much as possible towards their own retirement, in order to mitigate the damage caused by their own unions and CalPERS through deception and poor planning.
The other day Fullerton school board candidate and self-described “fiscal conservative” Janny Meyer joyfully announced her acceptance of the Fullerton teachers’ union endorsement.
Well, it's kind of a gray area.
This registered Republican must not be interested in GOP support, since that party has forbidden candidates from taking any union money.
But more importantly, Janny’s campaign is now backed by the very same teachers’ union that has repeatedly sacrificed your child’s education at the alter of paycheck protection. The result? Furlough days and increased class sizes, not good education.
It’s also the same union leadership that fights to protect bad teachers at all costs while refusing to allow schools to reward good teachers. They will boycott anyone who attempts to help parents evaluate teacher performance. They’ve instituted a system which puts young, energetic teachers up on the chopping block while coddling tenured teachers without any regard for job performance.
It makes my head hurt.
Of course, the union would love to pass a new property tax in Fullerton next year so they can keep shoveling money into this flawed system. Any idea how that conflict would churn in the head of a self-styled conservative who is also beholden to the union?
The other day we had a look at Pat McKinley’s ballot statement and something surprising popped up. Well, not really. Squeezed into the middle of his I-riddled statement was the curt phrase “I will work to reform public employee pensions.”
That's what they told me to say.
That’s a vague assertion, and frankly it’s hard to believe when it’s coming out of the mouth of one of the pension system’s most noted abusers – a double-dipping bureaucrat who pulls down well over two hundred grand per year in retirement thanks to a ridiculous 3-at-50 pension system that’s now bringing the city to its’ knees.
So what does McKinley mean by “pension reform” anyway?
It’s hard to tell at this point. That’s good for Pat; bad for the rest of us. You see, as long as he can keep all this pension reform talk clouded in empty platitudes, he can pretend to be a reformer and maybe nobody will notice that he hasn’t promised to really change anything.
So Pat, here’s the gauntlet: You need to commit 100% to serious pension reform. That means two things:
A mandatory 401(k)-style plan to replace the defined benefit for all new hires
Current safety employees must pay the full 9% towards their own retirement, as required by state law.
Take a look at our city’s unfunded pension liability and do the math. Any lesser reform will amount to nothing more than a laughable gesture to taxpayers, ensuring that even more pain awaits us down the road.
Register reporter Adam Townsend dropped a bomb early this morning with an in-depth report on Fullerton’s astounding overtime costs.
The report summarizes the $3,000,000 spent on overtime last year, listing the top 102 overtime earners (view the Register’s list). Among them, a paramedic named Timothy Hartinger worked the most overtime in 2009 with 1,160 hours at time and a half pay, bringing his total earnings to a glorious $138,117.
Notably, these wage figures do not include an additional 33% in pension contributions or thousands of dollars in health insurance premiums for public safety union members.
Naturally, the overcompensated fire and police union members came up at the top of the list and made their best efforts to deflect criticism with emotional falsities. One fireman played the classic union card, repeating the claim that he would die 10 years earlier because his job is so dangerous. Nice try pal, but CalPERS actuarials have proven that public safety employees live just as long as everybody else.
FFFF favorite Jack Dean made his way into the report, saying “Considering the unemployment situation, it doesn’t appear to be right that there’s so much overtime when so many people are unemployed,” concluding “there appears to be something wrong with this structure.” Something wrong, indeed.
Even the city manager got in on the fun when asked about minimum staffing for firefighters, which significantly boosts their expensive overtime pay. “The provision is there because of the union. If I had my preference, I’d do away with it, but it’s sacred to the firefighters,” said Chris Meyer.
We’ve been hard on Register reporter Adam Townsend in the past, but it’s great to see that there’s still some life left in the Register’s local coverage. It takes a little bit of courage to rock the boat of public safety employees, and hopefully we’ll see more of this in the future.
We got some flak-back from some folks who tried to defend psuedo-journalist Norberto Santana of the union-sponsored Voice of OCEA that has become another sounding board in the Dem-for-Hire – ‘Pug-for-Hire, union promoting echo chamber.
So today we re-run the image of Santana with his financial impresario, union honcho Nick Berardino, in what appears to be the VOC(EA)’s Santa Ana office. And we invite you, our loyal Friends to provide your own captions.
Once again political whiz kid Billy Turner provides FFFF with fun fodder for our humble blog. Courtesy of a facebook image we are favored with the unsettling image of Orange County’s #1 Repuglican John Lewis being asked to dance by its #1 carpetbagger, Hide and Seek Harry Sidhu.
No, we don’t know who led, but presumably it wasn’t Sidhu, who is widely regarded as nothing but a tool. And oh yes, we see you, too Billy!
Here’s a clip that might be helpful to those who are still unaware of just how much public employee entitlements are costing us. Fullerton resident Jack Dean discusses bounteous union pensions and the careless drive towards financial ruin.
That was Hide and Seek Sidhu’s campaign mantra. And it seems as if his pals at the OCEA are serious about creating jobs, too. Here is an entry from craigslist a helpful Friend forwarded:
Communications Coordinator
Date: 2010-06-23, 9:07AM
The Orange County Employees Association was established in 1937 and represents many employees of the County of Orange and numerous cities and districts in Orange County. We are looking for a person with creative and organized thinking, excellent multi-tasking skills, outgoing personality and a desire for a career in a people-oriented field. This position requires an enthusiastic individual, self-motivated, who strives to get the job done right, exercises good judgment, pays attention to detail, and is always willing to learn something new. We are located in Santa Ana and would prefer that the successful candidate live within 20 miles of our office.
Job Expectations:
Under limited supervision, provide a wide variety of moderately complex communication services, including but not limited to developing a quarterly magazine, updating website content, writing articles, and administering election campaigns. Required to have an in-depth knowledge of journalism principles and practices and English composition.
• Must have some journalistic experience and be able to demonstrate the ability to write in a clear, concise, creative and expeditious manner.
• In a very fast paced environment, have the ability to be well organized, creative, remember complex tasks and follow through daily, weekly, monthly, and annually.
• Supervise and work closely with Communications Coordinator (Graphic Designer).
• Serve as Senior Editor of the quarterly magazine; plan and produce each issue from beginning to end, including identifying articles, writing articles, and developing and working with others regarding ideas for magazine layout. Work closely with printing company and post office.
• Manage website content. Create content to be posted daily or weekly, ensure that the website is up-to-date. Recommend major changes to website design, direction and content to ensure it accurately represents and communicates information.
• Must be able to work on multiple assignments simultaneously, use common sense and experience to prioritize work and budget time according to the importance of the project and the time available. Assignments must often be completed under tight deadlines.
• Develop and produce presentations, determine focus and format of presentations, research and develop editorial and graphic content, compile necessary materials.
• Be highly skilled in the use of computers and the internet, with quick working knowledge of Microsoft Word, Excel, and Outlook. Website experience highly desired.
• Establish schedules, strategies and communications methods for providing effective communications and marketing programs that promote OCEA’s goals.
• Consistently follow through assignments to completion, honor deadlines, be detail-oriented and punctual at all times. When needed, work afterhours to get the job done without being asked.
• Be willing to assist others, and commit to placing team and organizational goals ahead of personal ambition.
• Must be dependable and at work each day.
• Must have a positive attitude.
• Work directly with staff, when needed, to proof or write necessary written materials.
• Responsible for the gathering, preparation and control of records for the Communications Division.
• Take photographs of a wide variety of onsite and offsite meetings, activities and events.
• May serve as member of a team on communications-related projects.
If you are interested in this exciting opportunity, please email your resume with a cover letter that includes salary history, and samples of your writing to employment@oceamember.org. We offer competitive salary with excellent benefits. No phone calls please.
Compensation: Competitive salary, paid medical, 12 holidays, sick time, comp time, 401k matching, pension
Principals only. Recruiters, please don’t contact this job poster.
Please, no phone calls about this job!
Please do not contact job poster about other services, products or commercial interests.
Hmm. I got to thinking about this, and a natural candidate came to mind. Aw, come on. You were thinking the same thing, right? Go ahead, admit it:
I can do that...
Of course they will not be paying anybody 200 simoleons an hour, but hey, in this downturn a job’s a job, right?
If you needed any more evidence of the evident symbiosis between the The Voice of OC and it’s paymaster, Nick “Bullhorn” Berardino of the OCEA union you need look no farther this blog post by Norberto Santa. Please notice that 30 of the 31 comments are just pro-union/OCEA propaganda. 30 of 31.
Aw, c'mon Norberto, nobody's buying that...
Could Berardino be instructing his troops to frequent the union-sponsored blog just to keep the traffic up? Why not? It’s all one big, happy family, and The Voice never claimed to be objective – just non-profit.
