calpers

By Ed Mendel
Monday, March 18, 2013

Assemblyman Marc Levine, D-San Rafael, an upset victor last fall in a new election process, has introduced a bill containing Gov. Brown’s stalled proposal to restructure the CalPERS board, adding financial expertise and loosening labor control.

The proposal to change the board, which needs voter approval because of a labor-backed initiative in 1992, would double the number of gubernatorial appointees to six, matching the number of labor representatives.

“In the past, the lack of independence and financial sophistication on public retirement boards has contributed to unaffordable pension benefit increases,” said the 12-point pension reform proposed by Brown in October 2011.

The proposal said pension boards need members with “independence and sophistication” to ensure that retirees receive promised benefits “without exposing taxpayers to large unfunded liabilities.”

CalPERS sponsored legislation, SB 400 in 1999, that gave state workers a major retroactive pension increase. A deep pension cut in 1991 was rolled back. Retirees received a 1 to 6 percent increase in their pensions.

Highway Patrol pensions increased 50 percent, setting a costly bargaining benchmark for local police and firefighters that critics say is unsustainable. All of this, CalPERS erroneously said, would be paid for by investment earnings, not costing taxpayers “a dime.”

CalPERS also pushed for increases in local government pensions authorized by AB 616 in 1991, offering to inflate the value of pension fund assets to help pay for the increased cost of higher pensions.

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