Tag: public pensions

Gov. Jerry Brown Proves Me Right on Public Pensions »

As part of a year-long national campaign promoting my book California Dreaming: Lessons on How to Resolve America’s Public Pension Crisis, I’ve been saying that it’s impossible to have both public governance of defined-benefit public pension plans and responsible management of these plans. Politicians face strong perverse incentives to mismanage the plans for their...
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Friedrichs v. CTA Could End Compulsory Union Dues »

On January 11, the U.S. Supreme Court will hear arguments in Friedrichs v. California Teachers Association (CTA), a potentially landmark case. If the Court rules in favor of the plaintiffs, the financial strength and political clout of government employee unions across the country could be diminished greatly. Ten California teachers and a teachers’ group,...
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Milton Friedman’s Solution for Social Security Would Work for Government Pensions, Too »

Milton Friedman, the 1976 Nobel Laureate in economics, was interviewed on the television program Uncommon Knowledge in 1999, and he offered a solution to Social Security’s financial problems: shut it down. But Friedman didn’t advocate that the federal government walk away from its promises. Social Security participants are owed a stream of payments during...
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Actuary Hands Gift to Pension Reformers »

The actuarial firm Cheiron recently projected the future yearly pension costs for San Jose’s police and firefighter pension plan. Cheiron wrote: In the worst scenarios, the City’s aggregate contribution rate can exceed 110 percent of payroll. In the best scenarios, the City’s Tier 1 rate can drop to 0 percent, leaving a relatively small...
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Time for Bond Investors, Especially in Chicago, To “Know What You Own” »

Four U.S. cities went belly up recently, and all declared bankruptcy largely due to unaffordable government pension costs. The outcomes of these bankruptcies should make everyone think twice about lending money to cities with serious public pension debts. The graphic below shows the outcome of the municipal bankruptcies in Vallejo, Detroit, Stockton, and San...
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CalSTRS Boss Jack Ehnes Deceives Californians About Funding »

Jack Ehnes, CEO of the massive California State Teachers’ Retirement System (CalSTRS), deceived the public in a recent blog post opposing public pension reform in California: CalSTRS has not taken any “pension holidays,”’ which means contributions have been made continuously, thus reinforcing the sustainability of the fund. Ehnes fails to indicate whether: (A) $1...
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Democrats and Republicans to Blame for Public Pension Crisis »

I’ve appeared on more than 70 television and radio talk shows coast-to-coast in the past three months to discuss my new book California Dreaming: Lessons on How to Resolve America’s Public Pension Crisis. One common question has been: “Aren’t Democrats responsible for creating the unfunded public pension debt by over-promising pension benefits?” My answer,...
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Janet Napolitano Makes History as University of California Pension Reformer »

In an effort to control skyrocketing retirement costs in the massive University of California system, U.C. employees hired after July 1, 2016, will be able to choose a 401(k)-style pension plan, the first time this has been offered. Governor Jerry Brown and U.C. president Janet Napolitano negotiated the agreement, which was enshrined in the...
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Two Reasons to Pay Off Public-Employee Pension Debt Quickly »

In a recent op-ed in the Wall Street Journal titled “Pension Reform Doesn’t Mean Higher Taxes,” Andrew Biggs correctly pointed out that new Governmental Accounting Standards Board (GASB) rules require state and local governments across America to be more transparent about the financial health of their public-pension plans. But, as he noted, the rules...
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The Moral Argument Governor Brown’s Inaugural Speech Left Out »

As a teenager, Jerry Brown left Santa Clara University to attend a Jesuit seminary, intent on becoming a Catholic priest. Moral arguments in the context of public-policy debates have always been important to him. So during his inaugural address on January 5, as he became California’s governor for an historic fourth term, Brown quoted...
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