Changes Are Needed for a Solvent Pension System

I disagree with your conclusions regarding the California Public Employees’ Retirement System (“State Pension System Needs Overhaul,” James Flanigan, Jan. 23).

The problem with the system is not CalPERS but the politicians who grant pensions to their employees without regard to fiscal responsibility.

I am retired from the city of Whittier. The city has not increased the pension benefits to general employees for more than 20 years, and as a result they have a surplus in their CalPERS account. The average employee could not earn the same returns with a 401(k) plan that CalPERS has earned.

The state and public agencies that are in trouble are those that gave their employees huge increases in retirement benefits during the boom years and can’t take them back. San Diego and Orange County have made promises to their employees that are costing the cities dearly.

Blame the politicians for the state of the retirement system, not the people who operate the system. The politicians run a giveaway on retirement just as they do with the rest of their operations. That’s why we are going into bankruptcy.

Clyde Haight

Whittier

*

What would the current condition of and future prospects for the state pension system be if the ability to retire was primarily governed in the same way as Social Security -- by the attainment of certain ages, based on your birth date and not by years of service?

I’m 63, I will be eligible for full retirement benefits from my company retirement plan and Social Security at age 65 and 8 months; but most of my peers who have been employed as teachers or city, county or state employees were all retired with full retirement benefits years ago.

Michael J. Daillak

Bakersfield

*

Let me see if I understand this correctly. According to Mr. Flanigan, President Bush’s plan to replace Social Security with a private account is bunk, because there’s no problem with the system. The shortfall in Social Security can be fixed, he says, with some minor changes in the tax (raise it a bit) or some minor cuts in benefits.

The California state pension plan, however, needs to be replaced with a 401(k), “because the municipalities that pay into them, beset by their own budget woes in recent years, have deferred their annual contributions.”

This will solve the problem by stiffing the state workers (yes, I am one of those workers), who will “earn 1% to 2% less per year than defined-benefit plans do.” So apparently the solution is to take the same amount of money which isn’t enough to cover the retirement bill and invest it with a lower rate of return. And this will help how?

While it will certainly mean a poorer retirement for state workers, it will have the added benefit of siphoning more of our money into the pockets of Wall Street money managers.

Paul Orwin

Assistant Professor of Biology CSU San Bernardino San Bernardino

*

Citing pension cuts as an alternative to letting the poor and sick get squeezed seems disingenuous.

You surely don’t believe that any money saved by such cuts will go to the poor and sick, do you?

Closing loopholes for and stopping favors to Gov. Arnold Schwarzenegger’s real estate and business patrons would provide way, way, way more money for the average Californian, sick or not.

B.A. Tunick

Culver City

*

Not addressed in the various articles about the state pension system is that state employees do not receive Social Security upon retirement.

The state pension system is our social security.

We teachers pay 8% of our salary into the California State Teachers’ Retirement System, then contribute to 403(b) plans beyond that. Without CalSTRS or CalPERS, state employees would have no safety net upon retirement.

Carol May

Los Angeles