WHAT THE CALIFORNIA UNIONS GAVE BACK

They didn't surrender their right to collective bargaining but they did make substantial concessions.

State employee benefits cut back enough
On Pension Reform
February 10, 2011|By Dave Low
SAN FRANCISO CHRONICLE

With all the hyperbole about "pension tsunamis" and "unfunded liabilities," it's easy to forget facts. Retirement funds for public employees were fully funded in the 1990s, in part because of outstanding market earnings. Then the banking fiasco pummeled the earnings of all Americans, wiping out savings and 401(k) accounts and causing pension funds to lose billions of dollars.

Last year, former Gov. Arnold Schwarzenegger called for the rollback of retirement benefits to 1999 levels, stating, "All I'm asking is for them to reform and roll it back and we will be home free." His pension adviser, David Crane, said that the benefit rollback would save the state more than $90 billion.

They got their way.

State employee unions not only agreed to roll back the 1999 benefits but also went even further, agreeing to create a two-tier retirement benefit, forgoing one-year averaging for pensions in favor of three-year averaging, and increasing employee retirement contributions. Hundreds of billions of dollars will be saved in coming years by these concessions from employees, whose retirement benefits average only $2,200 per month.