After my first column proposing a compromise for City Hall’s finances, by far the most negative response I got was from the city’s employees. What encouraged me is that many would take issue with this or that suggestion I had about their benefits, but they were maybe OK with, or accepting of, a couple of the other cutbacks I suggested.
This was good, I thought, because it went along with the assumption that there is a middle ground to be had. So often we hear the employees and their unions say there is nothing to give and we hear taxpayer advocates hold up their hand and turn away.
After my latest post on the issue, here, I was surprised to get some negative feedback from a couple of taxpayer advocates. Most of them seem to have focused on this sentence: “Public employees deserve a defined-benefit pension.”
Here was reader BB on that:
I’ll start by taking strong issue with your “Truth II,” that public employees deserve a defined-benefit pension plan. Do you have one? I thought not. I do, but I’m 77 years old, and it’s pretty modest with not even a COLA .
Yes, defined benefit pensions are going the way of the record store. Even workers at the Union-Tribune found theirs cut off several weeks ago. I think “deserve” is the wrong word. It has an air of entitlement rather than earning.
But just because I don’t yet have a defined benefit set up for when I retire and just because American companies seem to be shedding them left and right, it doesn’t mean this is a good trend we should fuel.
At a forum I moderated last week — a sort of debate between three conservative taxpayer advocates and Michael Zucchet, representing the largest city employee union — even the conservatives acknowledged that they thought maintaining a defined benefit for workers in public service was OK.
One of them, Marcia Fritz, is pushing hard for major, and in many ways, very logical reforms to public pensions in California. She said she supported a defined benefit pension. April Boling, the accountant who ran for Jim Madaffer’s seat and was opposed fiercely by local labor unions, also said she thought city employees should have a defined benefit pension.
(It was a great forum, by the way. Boling, Fritz and Councilman Carl DeMaio all had interesting points and Zucchet held his own against all three. It was a sophisticated and productive discussion, I thought, without all of the vituperative blaming that might usually come out when this issue is discussed. I’ll post the video when it’s available.)
What we all have a problem with was just how inflated the defined benefit got. And as Fritz pointed out, it’s all because a bizarre pension inflation occurred in California when public agencies began “competing” with each other to offer better benefits. Remember, the city’s scandalous 2002 benefit enhancement came only months after the county of San Diego decided to raise its pension benefits by 50 percent.
Fritz has a simple solution: Mandate that all public agencies in California offer similar pension benefits. This ends the rampant inflation and protects a good benefit for the long-term.
It’s these huge increases that have left us where we are. They have given defined pensions a bad rap and the excesses have made it very difficult for future generations to try to match. And although, as the former city attorney found out, they are impossible to fully roll back, it doesn’t mean they are sustainable.
So while I believe that hard work can be rewarded with a dependable pension, these systems have to be reasonable and, above all, affordable.
As I said, I think we can raise money and do a lot to ensure we can set aside enough assets to pay much of what was promised, as long as we do what we can to reform what wasn’t.