Brown’s pension-reform plan avoids making the tough choices 

The timing of Gov. Jerry Brown’s “12-point pension-reform plan” last week was no accident.

The plan was released a couple days after his negotiations with Republicans on a state budget deal collapsed. The latter contended that Brown had balked at their demands for public pension reforms because of opposition from unions that helped him win the governorship last year.

Thus, the plan’s release was aimed at giving Brown political cover, implicitly demonstrating that he’s tough-minded on pensions and not beholden to the unions. But while a 12-point plan sounds impressive — especially coming from a politician who historically has sneered at multipoint policy plans — there’s less there than meets the eye.

The political debate over public pensions has been conducted on two levels, the largely superficial and the meaningful.

The superficial aspects — anecdotal accounts of outrageous pension manipulation — have received the most media attention. Meanwhile, the more meaningful issue of whether taxpayers and employees face a ticking time bomb of unfunded liabilities is complex and unsexy, receiving relatively little attention.

For the most part, Brown’s plan deals with the former rather than the latter. It gives the illusion of being tough on pension issues without making truly tough choices.

Much of it deals, for instance, with “pension spiking” through various manipulative techniques — outrageous, certainly, but of little effect on the larger and more serious issue. Other points are of equally light weight, such as prohibiting retroactive pension benefits or pensions for convicted felons.

Meanwhile, the plan either omits anything that would touch the larger issue of unfunded liability or places it in the category of “under
development.”

A couple of years ago, the chief actuary of the California Public Employees Retirement System told a pension seminar that the system’s benefits were “unsustainable.” Outside analysts have pegged the potential unfunded liabilities of Cal-PERS, the California State Teachers Retirement System and the University of California pension system as high as a half-trillion dollars.

A real pension-reform plan would first seek independent and expert analysis of unfunded liability and then lay out what’s needed, in either reduced benefits or increased contributions by taxpayers and employees, to cover it.

So far, however, all we’re getting from Brown is fluff.


Dan Walters’ Sacramento Bee columns on state politics are syndicated by the Scripps Howard News Service.

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Dan Walters

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Thursday, Nov 20, 2014

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