McCarthy is president of the California Taxpayers’ Association
Pension Reforms Are a Must in 2005
The Legislature must act...
[Larry McCarthy] 2/10/05
State and local government pension costs have shot through the
roof and are threatening the funding of essential programs throughout
California. It is time for action to stanch the bleeding.
are growing signs that this will be a front-burner topic for
the state Legislature in 2005. Taxpayers are well-advised to
watch developments closely.
to significant news coverage, particularly in The Sacramento
Bee, the Legislature is scheduled to conduct a special
hearing on January 24 in Sacramento. The Bee has uncovered
outrageous abuse of disability retirements among top officers
of the California Highway Patrol. Also, there are alarming
numbers of sheriff’s and fire department personnel filing claims
for injuries as they prepare retirement papers in Los Angeles
County, according to the Los Angeles Daily News.
the California Public Employees’ Retirement System board, which
is dominated by public employee unions, has voted unanimously
to sponsor legislation to help clamp down on disability retirement
action by the Legislature is needed on measures to order regular
medical examinations to make sure those on disability retirement getting
preferential tax treatment are not misusing the system. Disability
retirement was intended to generously protect public safety
officers and their families if disabling injuries are sustained
while working to safeguard Californians. Unfortunately, the
program has wandered far from this objective.
must be a well-defined crime of disability pension fraud with
criminal and civil penalties, and restitution. Beyond
that, there must be review of disability retirements that may
be sanctioned under current law but allow individuals to launch
lucrative second careers. A final legislative package, whether
sponsored by CalPERS or others, must not be watered down as
it goes through the process.
state could roll back its 1990 decision to base pensions on
final year salaries, which has allowed many to spike their
pensions, according to a report in The Bee. Cal-Tax
pursuing these fixes in the system, the Legislature must also
embrace sweeping reform of the entire public retirement system,
state and local. This would prevent future state and local
budget problems that now amount to billions of dollars.
supports ACA 5, by Assemblyman Keith Richman, which
would take future state workers out of the overly generous
defined benefit pension system that will be impossible for
taxpayers to pay for and place them in a defined contribution
plan, similar to the 401(k) investment retirement plans available
to the vast majority of those not working in government jobs.
currently employed with the state or local government would
continue with the program they have, which has become unaffordable
as governing bodies, under intense lobbying pressure from increasingly
powerful public employee unions, have approved more and more
pay and benefits.
Richman calls the runaway costs of public pensions a “ticking
time bomb.” He is absolutely correct. CRO
2005 California Taxpayers' Association