California Pension Dust Up!

Last week I wrote Pension Reform In California about pensions reform in California. What happens in California will have an impact on pensions across North America.

On Thursday in the Los Angeles Times there was an article called Why did Schwarzenegger bail on pension reform? The article speaks about Schwarzenegger backing out of a commitment he made to reforming pensions in California.

In the LA Times article, two advocates for pension reform address the issue. The first is an analyst with American Federation of State, County and Municipal Employees. The secound perspective is countered by the head of California Foundation for Fiscal Responsibility. The article makes for interesting reading.

On Friday there was a follow-up article called CalPERS: a looming disaster? This article once again features the perspective on the two sides in the previous article. It addresses the huge shortfalls of Calpers, the largest California public sector pension fund.

Almost all public sector employees defined benefit pensions are suffering serious shortfalls and are perceived to be overly generous.

The articles together do a good job of describing in a comprehensive way the main issues surrounding pension reform. Pensions reform is coming to North America and the battle is on to see what it will look like in its final form.

One interesting note to keep in mind when you read these articles is that Calpers covers 1.6 million members and has accumulated $191Billion. In Ontario the biggest pension plan is Ontario Teachers and at the end of last year they had over $110 Billion but only had 284,000 members. Calculate the average amount of assets per member for each plan. You will see how generous Ontario taxpayers have been funding public sector pensions.

Dig deep and keep working there is lots more to pay!

Canada promotes double dipping when most governments are eliminating it!

As the slogan for Red Rose tea says... Only in Canada Eh!

Jonathan Chevreau of the Wealthy Boomer and the National Post recently created a video that described how the Canadian government promoted double-dipping to Canadian public sector employees. Phased retirement video

This is a scheme that was hatched in the federal budget in 2007. There was not much discussion about the deal at the time. With the new environment in pensions it has highlighted the huge gap between public sector pensions and the average Canadian retiree. The idea was originally designed to help companies deal with labor shortages. Of course the bureaucrats who wrote it made sure that there was something in it for themselves. Phased retirement article

It was an issue that I had written about before in a previous article Double-Dipping. Imagine getting your gold-plated pension at age 50 and then government telling you they want to have you back at your old job... at full pay. With the elimination of mandatory retirement we will see public sector employees eligible for 2 gold-plated pensions.

I have been advocating for pensions disclosure similar to the Sunshine List in Ontario and B.C. There is one in California that lists those pensioners earning over $100,000 per year. We need one in Canada to list those who have excessive pensions in Canada. They were after all negotiated between them and the taxpayer. the only problem was that during the negotiations the taxpayers had no-one to represent them.

Most government in North America are looking for ways to eliminate double-dipping and Canada wants to promote it.
In Arkansas - State legislator puts spotlight on ‘double dipping’ county officials
Ohio needs to rein in double-dipping by public officials
Double Dipping in Florida
Upset in Delaware about double-dipping