CALPERS CHANGES CAUSES CONCERN IN CALIFORNIA
Posted: Friday, January 20, 2017 2:56 pm
RPEA Seeks Involvement to Protect Retirees’ Pensions
SACRAMENTO, CA – On December 21, 2016, the California Public Employees’ Retirement System (CalPERS) Board of Administration voted to lower the discount rate, or rate of return, from seven and a half percent to seven percent over the next three years. Such a move will cause an increase to employers’ normal costs and unfunded actuarial liabilities from about one percent to three percent. Additional financial pressure will also be felt by local governments, which means potential burdens for cities in California already having trouble with pension plans.
Most recently, the citizens of Loyalton, CA, felt the shockwaves from an unprecedented move made by CalPERS this past year. Five of their own were notified recently that their pensions would be cut by at least 60 percent.
The City of Loyalton voluntarily left the CalPERS system in 2013 leaving a debt of $1.6 million. Three years later, in November of 2016, the Board of Administration for CalPERS declared the City of Loyalton to be in default. As a result, the five individuals in Loyalton saw a reduction in their pensions in accordance with California Public Employees’ Retirement Law per a CalPERS press release.
The five pensioners from Loyalton rely on their roughly $36,000 to $48,000 dollar yearly pension benefits. Now with their pensions cut, the reality of how life will be lived is left uncertain.
In response to the Loyalton situation, CalPERS stated that the decision was unfortunate and they regret having to make it, but they do have a fiduciary responsibility to keep the CalPERS fund secure. This is the first time in CalPERS history that they have cut retirees’ pensions.
With these recent changes, California retirees are concerned over the stability and future of their pensions.
George Linn, President of the Retired Public Employees Association of California (RPEA), recently addressed the Finance and Administration Committee of the CalPERS Board of Administration. Mr. Linn suggested that RPEA would be available to work with CalPERS staff with the goal to identify a safety net for retirees that might find themselves in a situation similar to what happened in Loyalton.
In an effort to highlight the responsibilities of all parties and prepare for times of financial uncertainty, RPEA also desires to work closely with Assemblymember Brian Dahle on a hearing that will hopefully result in clearly understood public policy and guarantee that every retirement earned and promised will be protected.
Since the beginning, RPEA has been actively involved in enhancing the lives of retirees. RPEA was founded in 1958 and has more than 24,000 members with 85 active chapters in California, Arizona, Nevada, New Mexico and Oregon. We are the only statewide association representing all PERS retirees. RPEA takes an active and involved role in CalPERS, serving on their Advisory Committee and meeting regularly with CalPERS executives and board members. RPEA works tirelessly to safeguard and promote the retiree benefits of California’s public employees.
For more information regarding retiree pensions and health benefits or to learn more about the Retired Public Employees’ Association of California, check out our website www.rpea.com.
SSA Powerpoint Presentation
Stop blaming public employees, retirees for California’s problems:
Guest commentary By George Linn
Tuesday, June 24, 2014 DailyNews.com LA Daily News (http://www.dailynews.com)
Stop blaming public employees, retirees for California’s problems: Guest commentary Last week hundreds of retired public employees gathered in Southern California for the Retired Public Employees’ Association of California (RPEA) biannual General Assembly. The five-day event joined retired public employees from around the state to discuss the many issues affecting pensioners in the state and to elect a new president to spearhead the effort to protect the benefits for all public employees. This assembly and leadership change comes at a critical time for public retirees as pensions continue to be the topic of discussion, and misplaced criticism, in California and across the nation. RPEA is the association in charge of protecting and enhancing retirement benefits for all public employees who receive their pension or health benefits from the California Public Employees’ Retirement System (CalPERS). Public employees are an important piece of the puzzle that makes up California’s economy. Unfortunately the portrayal of CalPERS and its retirees is often misconstrued as wealthy pensioners living in the lap of luxury, and nothing could be further from the truth. Public retirees, like our RPEA members, are a significant part of California’s economy. Not only did many of them dedicate their lives working to improve California’s schools, roads and increase public safety; they continue to be significant contributors to the economic strength of California. Many RPEA retirees do not receive employer-paid health care, and many do not receive Medicare benefits nor Social Security. For the most part, public retirees are being asked to live on modest incomes that fall far short of lavish. Seventy-four percent of CalPERS retirees receive less than $36,000 per year. The average monthly retirement allowance for all CalPERS retirees is $2,000, and some receive even less. Many public retirees do not receive Social Security benefits because their employers do not participate in the program. In addition to the moderate pensions that the majority of CalPERS retirees receive, a new study released by CalPERS shows a significant return on money paid to our retirees. It is reported that for every dollar spent on pensions, $10.85 is returned directly to the state. Pension checks generate more than $30 billion dollars in income taxes and sales taxes, and support tens of thousands of jobs. While pension reform continues to be a hot topic issue for many, a new CalPERS study shows that eliminating public pensions is not the right step for California. If CalPERS were to be eliminated, California would lose the $30.4 billion of economic activity it currently supports. This would create a budget hole that would fall on the back of taxpayers in the form of higher taxes and unemployment benefits due to the loss of thousands of jobs. Public employees are not the cause of the problems in California. The continuous blame being placed on them and CalPERS needs to stop, and I am ready to lead a new era of RPEA. George Linn is the new president of the Retired Public Employees’ Association of California.
Here is a link to the op ed in the California Labor Federation’s publication by President George:
Here is the text:
A New Era: Hundreds of Retired Public Employees Elect New President
Northern California Native – George Linn Elected
The Retired Public Employees’ Association of California (RPEA), a statewide association representing more than 30,000 members, announced today that George Linn, currently on the RPEA State Board, will become the President of RPEA.
“We are very pleased that George, an accomplished industry veteran, will lead us forward. His strong leadership, combined with his deep knowledge of public pensions and health benefits will ensure our continued success into the future,” said the RPEA Board in their election announcement.
Linn brings more than 20 years of public service to the role. His decades of experience took place in the city he still calls home: San Francisco.
Linn was the Director of Audit at the San Francisco Housing Authority, a CalPERS contract agency, for eight years. He then worked as the Chief Auditor and Audits Director for 12 years with the City and County of San Francisco. Linn has many years of experience as an elected board member, including a seat on a national board of directors for over 20 years, a private secondary school for eight years, and several other civic and private boards.
Most recently, Linn served for six years as the RPEA Director of Public Relations. In this position he meet with legislators, testified at CalPERS committee hearings and board meetings and edited the RPEA bi-monthly newsletter.
“I am delighted that RPEA members have selected George as my successor,” said Harvey Robinson, immediate past RPEA president. “Linn will lead RPEA with thoughtfulness, style and energy. I know that under his leadership, the core values of this organization will remain strong.”
RPEA members from across the state attended the bi-annual General Assembly in Los Angeles (June 16-20), where they elected George Linn as their new president.
"I believe in teamwork to accomplish goals,” said Linn. “RPEA is a recognized leader for thousands of retired public employees who dedicated their lives to making California a better place to live. Working together with informed leadership, we can ensure those who kept our state moving forward are afforded the retirement they deserve.”