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Calif. Forces Retirement Plan After Pension Failures

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California's Gov. Jerry Brown oversees pensions in California. (AP)

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Sunday, 18 Sep 2016 08:48 AM Current | Bio | Archive

The New York Times reports the state of California has come up with a new pension plan called “Save for Retirement or Else!” Oh wait, that’s just the intent, not the name. The official title is a very reassuring “Secure Choice Retirement Savings Program,” and it’s designed for workers at companies with five or more employees who don’t currently offer a pension program.

Only there’s no choice. Employees are automatically enrolled in a “pension” that will deduct 3 percent from every paycheck and entrust that money to the tender mercies of state bureaucrats. Employees who stubbornly want to keep all their money and not band together with the rest of the workers and stride united toward a glowing future as one . . . wait, I got carried away. That’s what they’ll tell individuals who believe they can manage, or mismanage, their money on their own, without help from the state.

Those nonteam players will have to jump through a variety of hoops, fill out an incredible amount of paperwork and justify why they think they should be able to keep their own money.

Why, it’s just like the process for applying for a permit to carry a concealed weapon!

Naturally a board of functionaries is already waiting to get their grubby hands on your hard–earned money. A nine–member board has been working on the pick-pocketing scheme since 2012. So far their most significant accomplishment is getting an exemption from “the federal employee benefits law, known as Erisa, that now covers all nongovernment workers in California and the other 49 states.”

That should keep the indictments down and save a lot of money in legal fees.

Yvonne Walker, a board functionary who also happens to be president of a large Service Employees International Union local, assures investors their money will be used “initially to invest workers’ money in safe Treasury securities.” And Walker thought “Secure Force” might “ultimately hire both CalPERS and private firms to handle different investment options.”There’s the tipoff. CalPERS (California Public Employees’ Retirement System) is the union–dominated government employee pension program whose failures are strangling municipalities all over the state.

Asking CalPERS, with its investment record, to manage a pension fund is like asking if it’s too late to invest in sub–prime mortgage bonds. CalPERS started out with safe, conservative investments, too. But once public employee unions took over management of the fund, it has consistently lost money.

City Journal found “Wilshire Consulting reported last year that CalPERS’s returns over the past five years have trailed those of 99 percent of large public pension funds.” CalPERS lost $11 billion in the real estate crash after jumping on the bubble in late 2005. Board members have also been accused of “awarding contracts to political donors to alleged outright corruption.”

Prospects for the future don’t look any better. The shortfall between what CalPERS must pay out in benefits and the value of the pension fund is $290 billion if the fund can return a growth rate of 4.5 percent. In the just completed fiscal year CalPERS growth rate was a microscopic 0.61 percent, which means the shortfall is closer to a billion dollars.

Letting CalPERS manage more pension money is like asking Obama to be your doctor. Take the advice of someone near and dear to my heart, my step–mother Nancy Reagan, and “just say no.”

 

Michael Reagan, the eldest son of President Reagan, is a Newsmax TV analyst. A syndicated columnist and author, he chairs The Reagan Legacy Foundation. Michael is an in-demand speaker with Premiere speaker’s bureau. Read more reports from Michael Reagan — Go Here Now.

© Mike Reagan

 
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California Employees are being automatically enrolled in a “pension” that will deduct 3 percent from every paycheck and entrust that money to the tender mercies of state bureaucrats.
pension, california, brown
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2016-48-18
Sunday, 18 Sep 2016 08:48 AM
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