Category: Pension Spending

CalPERS’s Glass House

Dear Legislators,As a shareholder, CalPERS has been pressing corporations for better disclosure of environmental sustainability risks, yet CalPERS has been a leader in not disclosing financial sustainability risks, as I explained a decade ago in Dow 28,000,000. The consequences have been terrible, especially for our state's most vulnerable residents whose programs get crowded out whenever … Continue reading CalPERS’s Glass House →

Donor Rejection

Here's something Assembly Members Luz Rivas, David Chiu, Richard Bloom and Buffy Wicks don't want their constituents to know: - Start at https://www.calhr.ca.gov/labor-relations/Pages/Unit-06-Corrections.aspx, where you will see a list of 21 "Bargaining Units" that represent state employees who get paid billions of dollars per year upon the approval of state legislators and the governor. The … Continue reading Donor Rejection →

Breed And Garcetti Must Stand Up To Police Unions

LA and SF face large budget deficits because their mayors won't face up to police unions. The consequences for residents are terrible and there's an easy solution. LA and SF spend hundreds of millions of dollars per year on extravagant subsidies for retired employees, the most expensive of which are retired police who can retire … Continue reading Breed And Garcetti Must Stand Up To Police Unions →

POBs = Bankers As Pushers

Pension Obligation Bonds (POBs) do NOT reduce pension obligations. They increase pension assets, which produces an accounting benefit (more assets — the same liabilities = a lower unfunded liability).Economically, a POB is just a "carry trade," which is a borrowing at a low rate to bet on hopefully-higher-yielding products. Not surprisingly, Wall Street also sells those products (e.g., … Continue reading POBs = Bankers As Pushers →

Prison Guard Reform In California

Prison guards are the most expensive category of California's state pension expenditures, which have exploded: Research recently completed by the State and Local Government Finance Project at the Rockefeller College of Public Affairs calculates that two common sense pension reforms could cut state pension spending by 45 percent while still leaving retirees with hefty pensions. … Continue reading Prison Guard Reform In California →

Liberating Occupied California

Yesterday a GFCer wrote me to encourage immediate action on pension reform. In response I wrote, We don't expect pension reform to happen any time soon and certainly not before OPEB [retiree health insurance subsidies] reform, which we will attempt in 2021 with at best 50/50 odds of success. That doesn't mean we aren't working … Continue reading Liberating Occupied California →

NYT Can Do Better

A recent article in the New York Times about election results in California included the following sentence (italics added by me): “A measure that would have raised taxes on commercial landlords to raise billions for a state that sorely needs revenue also seemed on track for defeat.” The reporters did not provide support for their assertion — which they … Continue reading NYT Can Do Better →

Beware Banks Bearing Bonds

Investment banks are encouraging cities to issue “Pension Obligation Bonds.” They should be avoided. POB’s are expensive and risky accounting schemes. It would be different if cash obtained from such a bond was used to reduce pension obligations. But POB’s are used to increase pension assets, which just produces an accounting benefit at the cost of interest … Continue reading Beware Banks Bearing Bonds →

San Francisco Retirement Spending

Annual cash spending by the City and County of San Francisco on pensions and other post-employment benefits increased 146 percent from 2010 to 2019, to $864 million per year: Unfunded liabilities for pensions and other post-employment benefits grew even more — 243 percent, to $8.3 billion: Absent a cut in unfunded liabilities, San Franciscans can expect continuing growth … Continue reading San Francisco Retirement Spending →