Calpers sets up "The Pension Debate Information Center" re Privatizing Pen

Seems that Bush's plan to screw retirees so as to lower the tax burden on the rich has inspired Gov Arnie to offer the California rich the same chance to buy a pass from increased California taxes during record California budget deficits by simply donating to the "action hero"! Is anyone surprised? :-(

http://www.sacbee.com/content/politics/story/12186773p-13055630c.html
reports:"The State of Nebraska provides a strong example of the failure of individuals in a (defined contribution) plan to provide themselves with adequate income for retirement," the California Public Employees' Retirement System said in a recent statement."


http://www.calpers.ca.gov/index.jsp?bc=/about/press/pr-2005/jan/feckner-db-dc-statement.xml
January 6, 2005
CalPERS Says State Should Look Before It Leaps Into Privatizing Public Pensions
SACRAMENTO, CA - The following statement was issued today by Rob Feckner, Acting President of the California Public Employees' Retirement System (CalPERS) Board of Administration in response to recently announced initiatives to downgrade public pensions into a defined contribution plan.

"CalPERS has more than 70 years experience generating investment income to cover pensions. I believe it is unwise to abandon that model for a slap-dash effort to rush onto the law books a defined contribution plan that will be disastrous for everyone.

"Our investment research shows the defined contribution model will provide a meager retirement for most public workers, which today is on average only $20,000 a year, and it will cost more. Public workers will not be allowed to invest in all asset classes, and they'll pay six to seven times more in professional fees for the privilege of investing.

"It will not reduce the cost of government, in fact it will add to the costs for many years to come.

Most sadly, it will hurt California's economy because it will put an end to any pension monies being plowed back into the California economy. More than $19 billion dollars of our pension assets are invested into real estate, private businesses, and communities in California.

"We recognize and sympathize with the challenges that have been created for employers to pay their contributions following a downturn in the economy. We are working to build consensus among the employer community to reform the existing defined benefit plan method of contributions, and remain confident that with their help, we can solve the problem without going to draconian measures.

"Clearly, ideas rooted in the concept that government should simply toss this problem over the fence to the workers and not look back is extremely short sighted and will probably cause top quality workers to pursue careers outside of public service, causing a deterioration of quality work force needed to meet the difficult challenges this state will face in the future."

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January 18, 2005
CalPERS Sets Up Pension Debate Information Center
SACRAMENTO, CA – The California Public Employees' Retirement System (CalPERS) today announced a special Web resource on proposals to privatize State and public agency pensions.

"The Pension Debate Information Center" is intended to educate CalPERS members on existing programs and possible changes.

The proposals call for an end to the traditional defined benefit pensions for employees hired as of July 1, 2007. New employees would be placed in defined contribution plans that cap employer contributions and let employees invest in 401(k)-type pension funds. Under proposed legislation, existing public employees would remain in the present program, which guarantees retirement allowances set by formulas and financed mainly by returns on CalPERS investments.

The Governor also proposes in his 2005-06 budget an option that would allow present State employees to opt out of the CalPERS defined benefits program or keep their money on deposit, in which case the State would pay employees an extra stipend equal to what the State normally would have paid on their behalf. He further proposes that employees who remain in CalPERS double their contributions to the pension fund.

"We have received many member and employer requests for information about this topic. This new Web resource – the Pension Debate Information Center – will help our members stay abreast of developments and get information from CalPERS experts and others outside the System," said Robert Walton, CalPERS Assistant Executive Officer, Governmental and Administrative Services.

The Pension Debate Information Center includes research papers, fact sheets, CalPERS documents, and comparative studies of defined benefits and defined contribution plans.

To use the resource, visit www.calpers.ca.gov, select "About CalPERS," and "Pension Debate Information Center" under the "What’s New" link.