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RPEA Opposes AB 386
CalPERS Funded Status
Recent stock market gains have improved the funded status of CalPERS pension assets to approximately 78%. This is a welcome improvement after several years of weaker funded levels. Rating firms (Moodys, S&P and Fitch) consider public pensions healthy at 80% funded status. Striving for 100% funding remains the goal of any pension fund.
Al Darby, VP
Call for CalPERS President, Henry Jones, to Resign
The Board of Directors of the Retired Public Employees’ Association of California (RPEA) has called for the resignation of Henry Jones, President of the CalPERS Board of Administration. Numerous reasons are cited; lack of transparency, refusal of Board member requests for an emergency meeting to determine the nature of the CIO, Ben Meng’s, abrupt resignation, failure to support investigations into apparent false statements by CalPERS CEO and CFO, poor judgment on several matters and other issues. See the full letter from RPEA to Mr. Jones here.
PRELIMINARY 2021 HEALTH PLAN RATES
Pension Protection Resources
New Report on the Value of Public Pensions. As we know, defined benefit pensions not only provide a secure retirement for our members; they also contribute to economic vitality though the stable income that seniors spend in our communities. Just out this week, NCPERS released a research paper, 2020 Unintended Consequences, that shows that public funds helped power the U.S. economy, generating $179.4 billion more in state and local government tax revenues than plan sponsors contributed to their plans. This report built upon a 2018 report that documented state and national tax revenue generated by public pensions. This is a great update and complement to the often-cited Pensionomics 2018 report, released by NIRS, which found that retirees’ spending of pension benefits in 2016 generated $1.2 trillion in total economic output, supporting some 7.5 million jobs across the U.S.
Our Pensions Are Not the Problem. Not only are our pensions economic drivers, using progressive tax and revenue policy, states have tools to fund them. To highlight the connection between tax policy and pension funding, Good Jobs First released the second installment of its 13-state report, "Putting State Pension Costs in Context." This report found that Colorado, Georgia, Louisiana, Missouri, South Carolina, Texas, and Vermont together spend more than $17 billion per year in corporate development subsidies and tax breaks, which is about five times those states' yearly pension obligations. The first report, released in January 2020, looked at Arizona, Connecticut, Kansas, Kentucky, Oklahoma, and Wyoming and found that huge tax breaks and other subsidies to corporations also exceeded pension obligations in those states.
A Pension Defense Toolkit. With concerns about pension defense on the rise, we want to share the Public Pension Defense Toolkit from NCPERS, attached, which includes legislative action checklists, state case studies and guidance for media work. Another helpful resource is a 2019 NIRS report, showing that shifting new employees from defined benefit pensions to defined contribution or cash balance plans actually resulted in increased taxpayer costs without any major improvements in funding. The report, Enduring Challenges: Examining the Experiences of States that Closed Pension Plans, draws from case studies in four states that closed their pension plans in favor of alternative plan designs: Alaska, Kentucky, Michigan, and West Virginia.
Additionally, the National Public Pension Coalition, which supports state level pension defense coalitions, has a wealth of pro-pension resources at the ready for states, including videos on pensions and pension opponents, and pension one-pagers and reports.
RPEA Bills in Legislature
“Assemblyman Jim Cooper is carrying two RPEA sponsored bills in the legislature for RPEA. AB2378 would allow CalPERS to add to the existing death benefit an annual increase based on the California Urban Consumer Price Index (CPI). AB3359 would allow the California Urban Consumer Price Index to be used in calculating the annual Cost-0f-Living-Allowance (COLA) most of us see every May - this is a better measure of CPI in California. We will keep you apprised of the progress of these bills. We hope to interject two other matters into the legislative process this year as well. Great thanks to our Legislative Committee and Aaron Read and Pat Moran, our lobbyists, and especially Assemblyman Jim Cooper.”
Two RPEA Sponsored Bills
“Assemblyman Jim Cooper is carrying two RPEA sponsored bills in the legislature for RPEA. One raises the CalPERS Death Benefit to $5,000 and the other one calls for the ‘CA Index’ to be the Cost Of Living Allowance (COLA) determiner. We will keep you apprised of the progress of these bills. We hope to interject two other matters into the legislative process this year as well. Great thanks to our Legislative Committee and Aaron Read and Pat Moran, our lobbyists, and especially Assemblyman Jim Cooper.”
Breaking News: "Answer to CalPERS China Investment Questions"
"China investments by CalPERS have been in the news lately and it is suggested that this is somehow supporting Chinese military objectives and this is not in the best interest of the U.S. The truth is that CalPERS investments in China have actually been declining in recent years and now stands at 1% of its stock portfolio or about $2 billion. These claims in certain news outlets that CalPERS is contributing to Chinese theft of U.S. intellectual property are probably largely inaccurate. U.S. companies with factories in China are more likely to be inadvertently giving up more intellectual property than CalPERS ever could through its stock holdings in China. Most pension funds around the country are invested in China along with CalPERS."