Politics, Government and Business in Southern California's Inland Empire
By Dan Walters
dwalters@sacbee.com
Published: Sunday, May. 12, 2013 – 12:00 am | Page 3A
Last Modified: Sunday, May. 12, 2013 – 7:33 am
There’s absolutely nothing wrong, per se, with incurring debt, whether it’s by families, businesses or governments. A functional credit market is absolutely vital to a modern economy.
By Dan Walters
dwalters@sacbee.com
Published: Sunday, Apr. 28, 2013 – 12:00 am | Page 3A
Last Modified: Sunday, Apr. 28, 2013 – 7:25 am
David Crane, a businessman who advised former Gov. Arnold Schwarzenegger on financial matters – particularly long-term public pension deficits – recently wrote an I-told-you-so piece for the Bloomberg news service about the State Teachers Retirement System.
By Ed Mendel
Monday, April 15, 2013
If not for pension and benefit increases as the stock market boomed more than a decade ago, CalSTRS would be one of the nation’s best-funded large retirement systems with 88 percent of the assets needed to pay promised pensions.
By Dale Kasler
dkasler@sacbee.com
Published: Thursday, Mar. 21, 2013 – 12:00 am
Last Modified: Thursday, Mar. 21, 2013 – 7:48 am
Lawmakers began confronting a multibillion-dollar budget headache Wednesday that’s been looming for years: the funding gap at the state teachers’ pension fund.
By Ed Mendel
Monday, March 11, 2013
A nationwide study, including CalPERS and CalSTRS, projects that huge pension fund losses during the financial crisis will be offset over three decades by a wave of recently enacted cost-cutting reforms — but only if several things happen.
By Ed Mendel | 02/18/13 12:00 AM PST
Some still have hard feelings about what happened when CalSTRS, now deep in the red, had a brief funding surplus more than a decade ago: Teacher and state payments into the fund were cut, and retirement benefits were raised.
By Daniel Borenstein, Staff columnist
Posted: 02/08/2013 12:00:00 PM PST
Updated: 02/09/2013 05:49:07 PM PST
Gov. Jerry Brown’s claim that he balanced his proposed 2013-14 budget ignores that he’s driving the state teacher pension system deeper into debt by shortchanging it at least $4.5 billion.
By Dale Kasler
dkasler@sacbee.com
Published: Saturday, Feb. 9, 2013 – 12:00 am | Page 6B
CalSTRS reported higher investment returns this week, but the teachers’ pension system continues to grapple with an enormous long-term funding shortfall.
Capitol Alert
The latest on California politics and government
February 4, 2013
The trust fund that provides pensions to retired teachers has a $64 billion deficit and would need a $4.5 billion per year infusion of revenue to become fully solvent, according to a new internal study.
By Ed Mendel
Monday, Fenruary 4, 2013
A new report says CalSTRS needs $4.5 billion more a year to fully fund pensions over the next three decades, a 75 percent increase in the $6 billion total annual payments now being made by teachers, school districts and the state.
By Jon Ortiz
jortiz@sacbee.com
Published: Thursday, Dec. 20, 2012 – 12:00 am | Page 3A
We expect government transparency. Wall Street loves the backroom deal.
On ever-shifting ground between them you’ll find public pension funds, unique government organs that pump hundreds of billions of taxpayer dollars into private investments.
PolitiCal
On politics in the Golden State
December 17, 2012 | 4:58 pm
BushmasterAn investment made by the California teachers pension fund is coming under scrutiny because of its link to the manufacturer of the assault rifle used in the Connecticut elementary school massacre.
By Ed Mendel
Monday, September 17, 2012
What CalSTRS regards as its “most significant reform issue” was not in the pension reform bill signed by Gov. Brown last week. But a long-sought first step toward closing a huge gap in the teachers’ pension fund is in a companion measure.
By Ed Mendel
Thursday, August 31, 2012
A pension reform plan worked out by Gov. Brown and Democratic legislators could save state and local government employers $40 billion to $60 billion over the next 30 years.
The preliminary CalPERS estimate, which will be refined before the Legislature votes on the plan Friday, expects most savings to come from two cost-cutting strategies used in labor negotiations: lower benefits for new hires and higher employee contributions.
By Ed Mendel
Monday, August 13, 2012
If the Legislature attempts pension reform this month, one of the targets may be “air time,” a decade-old policy that allows CalPERS and CalSTRS members to boost their pensions by buying up to five years of additional service credit.
By Ed Mendel
Monday, July 30, 2012
The IRS is taking a new look at whether public pension systems qualify for tax deferrals, raising questions about nonprofit charter schools in CalSTRS and county systems using “excess” earnings to fund retiree health care.
Taxes on employer-employee contributions to pension systems and their investment earnings can be avoided until retirees are paid. But if the rules are not followed, the IRS can change the tax status and impose fines and penalties.
By Marc Lifsher, Los Angeles Times
July 17, 2012, 7:00 p.m.
SACRAMENTO — Corporate and public pension funds across the country are seriously underfunded, threatening the retirement security of workers and straining the financial health of state and local governments, according to a pair of independent studies.
In 2011, company pensions and related benefits were underfunded by an estimated $578 billion, meaning they only had 70.5% of the money needed to meet retirement obligations, according to a report by S&P Dow Jones Indices.
By Ed Mendel
Monday, May 29, 2012
New public pension accounting rules scheduled to be issued next month, once expected by some to reveal massive hidden debt, now seem less likely to trigger a shake-up and are even getting applause from pension officials.
Under the new rules, experts say, most California pension systems will make little if any use of a lower “risk-free” government bond-based earnings forecast, currently about 4 percent, that causes debt to soar.
By Ed Mendel
Monday, April 30, 2012
Stockton has enrolled three mayors and 14 city council members in CalPERS since 1991, despite a provision in the city charter that clearly states no council member shall receive retirement or death benefits, the Stockton Record reported last week.
The discovery of $276,954 in unlawful city pension contributions comes as Stockton is in the national media spotlight during a last-ditch attempt to avoid bankruptcy, mainly by getting unions to agree to cuts in retirement and other costs.
By Ed Mendel
Monday, April 23, 2012
An annual look at CalSTRS, the nation’s second largest public pension system, once again raises the question of whether there is an urgent need to begin putting more money into the pension fund.
By Ed Mendel
Thursday, March 29, 2012
After a decade of similar below-target investment earnings, punctuated by huge losses during the stock market crash in 2008, the nation’s two largest public pension funds are looking at different futures.
The California Public Employees Retirement System, putting a new focus on risk, worries about another recession dropping pension funding levels to 40 percent or below, a “warning track” zone that could make it difficult to get back to full funding in the future.
By Dale Kasler
dkasler@sacbee.com
Published: Friday, Feb. 3, 2012 – 12:00 am | Page 6B
By lowering its investment forecast by another quarter point, CalSTRS made a bow toward economic reality – but also may have complicated efforts to shore up its finances.
The teachers’ retirement board agreed Thursday to reduce CalSTRS’ official investment forecast to 7.5 percent, down from 7.75 percent. It was the second cut in 14 months, after the $144 billion fund left the forecast untouched for 15 years.
In a volatile investment climate, following a year in which CalSTRS’ portfolio earned just 2.3 percent, board members took their consultants’ advice and went with the lower number.
“I think it’s best that we be conservative,” said Terry McGuire, representing board member and state Controller John Chiang.
The board of the California State Teachers’ Retirement System voted 9-1 to reduce the forecast. The lone dissent came from Pedro Reyes of the Department of Finance. The higher forecast “is not unreasonable,” he argued. “Let’s stay where we are right now, (and) visit this in another year.”
By cutting investment projections, the board instantly ballooned CalSTRS’ funding gap – the estimated shortfall of assets available to meet the pension fund’s long-term needs. The gap will grow by nearly $6 billion, or roughly 10 percent.
That could create problems in the Legislature, which must OK changes in how CalSTRS is funded.
CalSTRS gets around $5.6 billion a year from the state, school districts and teachers. The pension fund had already calculated that it needed another $4 billion a year to eventually get healthy. With the lower investment forecast, those needs grow by another $500 million a year.
While CalSTRS is pushing for more money, many Republicans want to erase funding shortfalls for public pensions by reducing benefits. Democratic Gov. Jerry Brown wants to give newly hired employees a combination traditional pension and a 401(k)-style program.
Read more here: http://www.sacbee.com/2012/02/03/4235828/calstrs-gap-rises-as-return-forecast.html#mi_rss=Business#storylink=cpy
By Jon Ortiz
jortiz@sacbee.com
Published: Friday, Feb. 3, 2012 – 12:00 am | Page 3A
Gov. Jerry Brown laid out a detailed plan to alter California’s state and local public retirement systems on Thursday – and immediately drew fire from his core labor constituency.
By Dale Kasler
dkasler@sacbee.com
Published: Wednesday, Feb. 1, 2012 – 12:00 am | Page 6B
CalSTRS is thinking of cutting its investment forecast for the second time in barely a year, a move that acknowledges the increased financial strain on the pension fund.
The teachers’ retirement board on Thursday will consider a recommendation from its actuarial consultant to cut the forecast by a quarter point, to 7.5 percent.
Monday, January 30, 2012
By Ed Mendel
The nation’s two largest public pension funds last week reported slim annual investment earnings, CalPERS 1.1 percent and CalSTRS 2.3 percent, as experts continue to say hitting their long-term earnings target, 7.75 percent, will be difficult.
While CalPERS reported weak earnings in 2011, a prominent private-sector investment manager, Robert Arnott of Research Affiliates, told the board last week he thinks the most they can expect from stocks and bonds next decade is 4 percent.
By Ed Mendel
Monday,January 16, 2012
Mitt Romney’s presidential campaign is putting the spotlight on private equity, which public pension funds such as CalPERS and CalSTRS helped flourish and now need for better-than-average earnings.
Romney became wealthy while leading Bain Capital, a private equity firm he said created “tens of thousands of jobs” by buying and then selling troubled or stagnant companies after making them efficient, better managed and able to grow and prosper.
The State Worker
Chronicling civil-service life for California state workers
December 13, 2011
California’s three largest pension systems have promised $500 billion beyond their current ability to make those payments to retirees, according to a study released to today by Stanford University Professor and former Democratic Assemblyman Joe Nation and a student researcher.
The Stanford Institute for Economic Policy Research issued the report, documenting what it claims is the state’s deepening pension crisis. California Common Sense, an organization dedicated to engaging the public in “data-driven discourse” is also behind the report.
November 30, 2011 | 4:57 pm
Gov. Jerry Brown’s proposal to overhaul public pensions in California may face legal hurdles and create some new costs, according to officials with the state’s two largest public retirement systems.
Thursday, December 1, 1011
By Ed Mendel
Gov. Brown yesterday appointed two CalSTRS board members with decades of experience in law and financial firms, a first step toward an ambitious pension reform plan he issued in October to end abuses and cut costs.
Monday, November 20, 2011 – 11:00 a.m.
One things for certain.
The sluggish stock market and record low interest rates has been and will continue to be a bad recipe for California government pension funds.
By Ed Mendel
Monday,November 20, 2011
The nation’s two largest public pension funds will urge corporate boards to disclose political campaign contributions, a response to a court decision lifting the lid on some donations that do not have to be reported.
By Anthony York, Los Angeles Times
November 9, 2011
Reporting from Sacramento— Gov. Jerry Brown’s proposal to alter public pension benefits is courageous but legally dicey, and key pieces of it have not been fully developed, according to a new report from California’s nonpartisan Legislative Analyst’s Office.
Monday, November 7, 2011
By Ed Mendel
A pension reform plan issued by Gov. Brown last month calls for more “independence and financial sophistication” on pension boards. Now he will soon have five openings to fill on the 12-member CalSTRS board.
Thursday, October 20, 2011
By Ed Mendel
In a settlement of a wrongful firing, a suburban San Diego water district agreed six years later to put its former general counsel back on the payroll for one year at $222,000, with a leave of absence that left him free to take another job.
By Dale Kasler
dkasler@sacbee.com
Published: Tuesday, Oct. 18, 2011 – 12:00 am | Page 1A
Last Modified: Tuesday, Oct. 18, 2011 – 7:55 am
California’s big public pension funds are already short tens of billions of dollars. An organization of accountants is about to make the picture look even worse.
Monday, October 17, 2011
By Ed Mendel
SAN FRANCISCO — The nation’s two largest public pension systems last week asked for a delay in new accounting rules that will make pension debt more visible, a change intended to aid decision-makers that some think may alarm the public.
Monday, October 3, 2011
By Ed Mendel
As state and local governments in California face soaring public pension costs, unions insist that cost-cutting changes must be bargained, not imposed by legislation.
But there is one major exception: schools.
Monday, September 19, 2011
By Ed Mendel
SANTA ROSA — The Sonoma County retirement board voted last week to release retiree names and their pension amounts, becoming the latest loser in seven separate superior court decisions since 2009 upheld by three different appeals courts.
By Dale Kasler
dkasler@sacbee.com
Published: Friday, Aug. 19, 2011 – 12:00 am | Page 6B
CalSTRS, billions of dollars under water, was dubbed a “high risk” problem for California by the state auditor Thursday.
Money & Company
Tracking the market and economic trends that shape your finances.
August 16, 2011 | 4:12 pm
A plan by the giant state teachers’ pension fund to ask the Legislature and governor this year to boost their financial support has been sidetracked by California’s continuing budget shortfall.
Daily Report: K–12
August 4, 2011 | Joshua Emerson Smith
The California Teachers Association and California State Teachers’ Retirement System are opposing a bill that would limit pension “spiking,” the practice of boosting salaries right before retirement to increase pension payouts.
The State Worker
Chronicling civil-service life for California state workers
August 1, 2011
A proposed initiative that would require the state’s public sector pension systems to maintain at least 85 percent of their investments in California-based businesses would weaken returns and fail to spur significant economic activity in the state, according to the Legislative Analyst’s Office.
Monday, August 1, 2011
By Ed Mendel
New public pension accounting rules will not change how rates paid by state and local governments are set. But how the public and lawmakers will react to a new way of reporting pension costs is less clear.
By Michael B. Marois – Jul 18, 2011 11:18 AM PT
The nation’s two largest public pension systems reported returns topping 20 percent for the year ended June 30, their best in more than a decade as the California funds profited from stocks and private equity.
By Dale Kasler
dkasler@sacbee.com
Published: Tuesday, Jul. 12, 2011 – 12:00 am | Page 6B
California’s two public pension funds are starting to make some money in real estate after several years of hard knocks.
Monday, June 27, 2011
By Ed Mendel
While not complying with an apparently flawed state law, CalPERS is opposing a similar federal bill calling for a report showing how pension debt could soar if long-term investment earnings are well below average.
Monday, June 6, 2011
By Ed Mendel
Under little-noticed legislation a decade ago, the nation’s second largest public pension fund, CalSTRS, became what is now advocated by several reformers — a “hybrid” combining pensions with a 401(k)-style individual investment plan.
Walters
By Dan Walters
dwalters@sacbee.com The Sacramento Bee
Published: Sunday, Jun. 5, 2011 – 12:00 am | Page 3A
The pensions received by California’s public employees have erupted into a very hot political issue, so hot that it has become one of the key issues in the state budget stalemate.
The State Worker
Chronicling civil-service life for California state workers
June 1, 2011
The Senate today passed without objection a bill aimed at blocking public employees from spiking their pensions and restricting double-dipping after retirement.
The State Worker
Chronicling civil-service life for California state workers
May 27, 2011
A bill that would freeze pay for the highest-paid state workers stalled today in the Assembly Appropriations Committee, effectively killing it.
By Tim Herdt
Ventura County Star
Posted May 6, 2011 at 7:55 p.m., updated May 6, 2011 at 9:33 p.m.
SACRAMENTO — An economic research firm hired to produce data that could justify an expected initiative campaign to scale back public-employee pensions uncovered what its authors called a surprising finding in its report issued this week: Teachers receive relatively modest pensions and contribute a sizable chunk of their earnings to fund their retirement benefits.
In an analysis of two concepts, the nonprofit California Foundation for Fiscal Responsibility warns that the state’s five biggest pension funds are in precarious financial conditions.
By Marc Lifsher, Los Angeles Times
May 5, 2011
Reporting from Sacramento— Pension benefits for hundreds of thousands of state workers would be reduced 25% to 40% under two proposals that have become the focal points for what could become a costly and bruising ballot fight over retirement funding.
Thursday, May 5, 2011
By Ed Mendel
A new study done for a pension reform group says retirement benefits for California public employees are often two or three times greater than benefits in the private sector, where pensions and retiree health coverage are dwindling.
The State Worker
Chronicling civil-service life for California state workers
April 13, 2011
The Assembly Appropriations Committee stalled a bill that would freeze the pay of non-union state employees earning more than $100,000 per year.
By Dale Kasler
dkasler@sacbee.com
Published: Friday, Apr. 1, 2011 – 12:00 am | Page 6B
CalSTRS’ pension funding shortfall has ballooned to $56 billion, a development likely to intensify the political debate over public employee retirement costs.
The California State Teachers’ Retirement System said Thursday its unfunded liabilities – the estimated gap between its assets and future pension obligations – increased by $15.5 billion in the fiscal year that ended last June. The new estimate came in a staff report to the CalSTRS governing board.
Monday, March 28, 2011
By Ed Mendel
Should the makeup of the governing boards of the two big state pension funds, CalPERS and CalSTRS, be changed?
The issue edged into the spotlight last week, pushed from the shadows by rising government pension costs and a CalPERS corruption scandal.
Wednesday, March 23, 2011 – 11:51 a.m.
With all the justifiable concerns being raised over the state of public pension funds, it seems appropriate to look at San Bernardino County’s pension fund to see just how good or bad the situation is.
What was discovered is not good.
March 23, 2011
It Is Actuaries vs. Local Governments Over Return Rates; ‘We Cannot Afford This’
By JEANNETTE NEUMANN And MICHAEL CORKERY
Some public pension funds are finding themselves caught in a squeeze between actuaries worried about future benefit costs and local governments worried about immediate budgets strains.
March 18, 2011
By Ed Mendel
Actuaries got another rebuff this week when the labor-friendly CalPERS board voted to leave its earnings forecast unchanged, much like a CalSTRS board action in December that did not lower its forecast as far as actuaries recommended.
By Dale Kasler
dkasler@sacbee.com
Published: Wednesday, Mar. 16, 2011 – 12:00 am | Page 8B
For months, CalPERS has been leaning toward reducing its forecast of annual investment returns – a move that would have forced state and local governments to pour millions more into the troubled pension fund.
Now CalPERS is backing away from the idea.
March 14, 2011
By Ed Mendel
As Gov. Brown seeks crucial budget votes, one reform proposed by five Republican senators would switch new hires to “hybrid” pensions, a cost-cutting combination of lower pensions and 401(k)-style individual investment plans.
The governor, who also must get votes from labor-friendly Democrats, reportedly could support a different plan: caps not only on the annual amounts pensions could pay, but also caps on the salaries on which pensions are based.
By Michael B. Marois – Mar 10, 2011 9:01 PM PT
Governor Jerry Brown’s proposed $12.5 billion in budget cuts won’t prevent California’s spending from increasing 31 percent during the next five years, according to figures from his budget office.
By Kevin Yamamura
kyamamura@sacbee.com
Published: Monday, Mar. 7, 2011 – 12:00 am | Page 12A
Last Modified: Monday, Mar. 7, 2011 – 12:21 am
How much is California’s public employee pension system underfunded? Determining that is about as easy as predicting the stock market.
Those who believe pensions are manageable often assume higher rates of investment return, while critics assume slower growth rates.
Capitol and California – Dan Walters
By Dan Walters
dwalters@sacbee.com The Sacramento Bee
Published: Monday, Feb. 28, 2011 – 12:00 am | Page 3A
Transparency is a bedrock principle of effective governance and consumer protection; one cannot make rational political, personal or financial decisions unless one has information about their potential consequences.
That’s why we have open election, meeting and records laws, that’s why food and over-the-counter drug packages have extensive data about their contents and that’s why banks must tell borrowers what interest rates they will be paying, to cite just a few obvious examples.
Taxpayers may face larger costs
Staff and Wire Reports
Created: 02/26/2011 07:05:29 AM PST
As California school districts anticipate possibly the worst budget crisis in a generation, many will try to lighten their burden by enticing older teachers into retirement.
But as more and more teachers retire – with a pension averaging 55 percent to 60 percent of salary – they will be straining a system that already can’t meet its obligations.
By Ed Mendel
February 25, 2011
CalPERS bent the rules to avoid hitting state and local governments with a big rate increase after heavy losses in the stock market crash. Now it’s being criticized for passing some of the cost for today’s workers to future generations.
The president of a new group working on a pension reform initiative, Dan Pellisier, said in a newspaper article last week that a CalPERS decision to remain underfunded is a “Ponzi scheme” and “intergenerational theft,” legal but immoral.
By Jon Ortiz
jortiz@sacbee.com
Published: Friday, Feb. 25, 2011 – 12:00 am | Page 1A
California’s state and local governments should roll back pensions for existing employees, dump guaranteed retirement payouts and put more of the burden for pension benefits on workers, a bipartisan watchdog commission said Thursday.
Money & Company
Tracking the market and economic trends that shape your finances.
February 22, 2011 | 3:33 pm
Gov. Jerry Brown has pulled back two controversial, last-minute appointments made by then-Gov. Arnold Schwarzenegger to a state teachers pension board.
By Sharon Noguchi
snoguchi@mercurynews.com
Posted: 02/21/2011 07:00:22 PM PST
Updated: 02/22/2011 05:27:26 AM PST
As California school districts anticipate possibly the worst budget crisis in a generation, many will try to lighten their burden by enticing older teachers into retirement. But as more and more teachers retire — with a pension averaging 55 percent to 60 percent of salary — they will be straining a system that already can’t meet its obligations.
By Ed Mendel
February 21, 2011
IRVINE–The author of a bill in Congress that would result in public pensions reporting much larger debts expects the same outcome as his opponents — a move to switch to the 401(k)-style individual investment plans now common in the private sector.
As U.S. Rep. Devin Nunes, R-Visalia, spoke to local government officials last week at a pension “boot camp” held by reformers, he said the federal action could spark action by “folks on the ground” in the states.
By Ed Mendel
February 11, 2011
The nonpartisan Legislative Analyst’s Office, saying current public pension systems are “too expensive and inflexible,“ is recommending two new pension models for future hires that shift some risk to workers and lower government debt.
Published: Tuesday, Feb. 8, 2011 – 12:00 am | Page 6B
CalSTRS stands to lose nearly $73 million after a New York office building it owns was hit with a foreclosure lawsuit.
Lenders last month sued in New York state court to foreclose on a Manhattan office building owned by the California State Teachers’ Retirement System and its partner, Silverstein Properties.
By Ed Mendel
January 31, 2011
A leading credit-rating agency, Moody’s, has begun treating unfunded pensions like bond debt, giving California a combined tax-supported debt of $136.9 billion that is well beyond other states but also may be understated.
The decision to add pensions to bond debt announced by Moody’s Investors Services last week reflects concern about public employee pension costs, which are growing as state budgets plunge deep into the red during a lengthy economic downturn.
By Dale Kasler
dkasler@sacbee.com
Published: Thursday, Jan. 20, 2011 – 10:40 am
Last Modified: Thursday, Jan. 20, 2011 – 5:16 pm
California’s two big public pension funds said today they earned investment returns of more than 12 percent last year, boosting their portfolios to levels not seen since the stock market crashed in 2008.
By Ed Mendel
January 10, 2010
Two CalSTRS programs that expired at the beginning of the new year are an example of what all three state public pension systems did in good times — pumped up pensions for retirees, while cutting payments into the pension funds.
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