California Educator, though, whistles past the graveyard. Why? Because the state won't renege on its promises to us, it'll just raise taxes to cover any money needed.
...School employees have no need to worry about their CalSTRS...pensions, which are fully protected by law. Fears that market fluctuations will affect CalSTRS or CalPERS payments after retirement are unfounded.
It gets better.
"CalSTRS benefits are not dependent on the funds in the CalSTRS investment portfolio," says Sherry Reser, spokesperson for CalSTRS. "These benefits are a contractual right protected not only by the California Constitution but also by the U.S. Constitution."
Wow, that's a whopper of a quote! First, Ms. Reser all but tells us that our retirements will be covered by the taxpayers, whether or not STRS makes good investments or has a nice new building. Then she states that my retirement is protected under the US Constitution! Try as I might, I cannot find that article or amendment that addresses CalSTRS.
A statement that huge cries out for an explanation, but none is forthcoming, at least in California Educator.
I didn't appreciate this comment:
"When CTA members retire, their pension is going to be there," says Reser.
What about those of us who are not CTA members?
I hope that my promised retirement awaits me, but I'm not very confident.
Update, 12/22/08: CalPERS will just go to the taxpayer, hat in hand.
I've read that that most state constitutions protect the pensions of state employees even in the event of a state default on its bond debt. My guess is that CalSTRS thinks that the California state constitution is one of these.
ReplyDeleteThe US Constitution would also apply *until* bankruptcy is/was declared.
What I don't understand is why the union critters are so certain that the taxpayers in 10-20 years won't look around and amend the constitution. Why should *they* be on the hook for debts incurred mostly before they were old enough to vote? I know that I wouldn't have any sense of obligation to pay debts that someone else racked up in my name ...
-Mark Roulo
How about the news of CalPERS' massive losses on the front page of the WSJ today?
ReplyDeleteWe saw this coming. From July:
What a coincidence. While things that have easily observable market prices (i.e. stocks) went down, everything that is valued subjectively went up! Private equity? It does great during a credit crunch when stocks are crashing! Just ask noted private equity players Blackstone Group or Babcock & Brown. And real estate? Well, whose real estate portfolio is not up at least 8% this year?
Nice numbers, CalPERS! Especially considering your investment in toxic waste CDOs at the beginning of the mortgage crisis, and your $1 billion dollar investment in the now-bankrupt LandSource at the peak of the real estate bubble.
Mark my words: CalPERS is lying about its performance, and there will be serious consequences for California retirees and taxpayers.