Pensions

CalPERS’ social investing comes at steep cost paid for by California taxpayers

The California Public Employees’ Retirement System, the nation’s largest state pension fund, claims that making investments based on myriad social priorities is good for business, even though a newly …

Gov. Brown finally spends political capital to fix pension system

Gov. Jerry Brown has more political capital than, perhaps, any modern politician has had in this state. He’s an iconic figure and smarter than almost anyone else in …

Will court filing salvage Jerry Brown’s legacy?

There’s little question that Jerry Brown has had a long and storied career in California politics. He was the state’s youngest governor when he was first elected in 1975 and …

Unions rigged the rules, but can do little more than brace for end of mandatory union dues

Virtually everyone enjoys the prospect of watching the class bully, who has spent ages tormenting the weak and powerless, get a justified comeuppance. It’s particularly entertaining when the tough …

CalPERS is shocked – just shocked – to find cities reeling under the burden of growing pension debt

The California Public Employees’ Retirement System’s union defenders feign shock whenever pension reformers accuse it of “kicking the can down the road” in dealing with the state’s mounting pension debt. …

Losing your pension? CalPERS wants to shift blame to cities

The nation’s largest state pension fund, the California Public Employees’ Retirement System, still is reeling from bruising publicity it received after it slashed the pensions for workers in …

The S&P and FTSE Russell should reverse course on dual class shares

The recent decisions by the S&P Dow Jones Indices to exclude all new dual-class share offerings from the S&P Composite 1500 (comprising the Standard & Poor’s 500 index, S&P MidCap …

California pension funds pushed by politicians to divest from gun industry

California’s two major pension funds, the California Public Employees’ Retirement System (CalPERS) and the California State Teachers’ Retirement System (CalSTRS), control more than $500 billion in total assets, making …

Daly’s cynical bill shows why public-sector abuses are rampant

Whenever I write about some of the absurd benefits and gamesmanship that flourish within California’s public sector, people write back in disbelief. They have no idea the many …

In good times and in bad, California’s pension fund managers win fat bonuses

California’s top pension funds have suffered through a few cycles of bleak investment returns and plummeting funding ratios, so we can’t blame them for wanting to celebrate after …

No coercing state to reform pension funds

Gov. Jerry Brown has been signing hundreds of bills, but this week he vetoed two that would have banned smoking and vaping along 300 miles of California’s coastline …

Forget the scary pension future; study confirms the crisis is hitting now

Debates about California’s pension crisis almost always focus on the big numbers – the hundreds of billions of dollars (and, by some estimates, more than $1 trillion) in unfunded …

City finance director says Oroville faces specter of bankruptcy

Most Californians are aware of the near-calamity at the tallest earthen dam in the nation, which sits east of the Butte County city of Oroville. More than 188,000 …

Cities facing fiscal mess plead with CalPERS as pensions consume budgets

If you ask the union-controlled California Public Employees’ Retirement System about the state’s looming pension crisis, you’re likely to get this answer: What pension crisis? But the story was …

Deputies’ pension and pay deals driving Southern California ‘contract’ cities to brink

More than a decade ago, the Orange County Sheriff’s Department offered a good value to cities that wanted to provide police services without having to operate their own …

TAPped out: The method to CalPERS’ madness toward tiny Sierra County city

Observers have wondered in recent months why the California Public Employees’ Retirement System, the nation’s largest state pension fund and one of Wall Street’s most muscular financial players, …

From well-funded pensions to basket case, San Francisco’s voters are to blame

The following op-ed was co-authored by David Schwartzman, a policy research fellow at the California Policy Center and a senior at Hillsdale College. Pension reformers had for years pointed to …

CalPERS’ divestment goals in crosshairs as coal stocks soar

A newly released report from the California Public Employees’ Retirement System confirms that, fulfilling the Legislature’s directive to divest from coal-related investments, the pension fund has now largely exited from …

Same old story as Loyalton’s woes echo growing pension crisis

The tiny Sierra Nevada mountain town of Loyalton, Calif.—population: 862—has become the poster child for cities that want to check out of the California Public Employee’s Retirement System, …

Expect unions to use good returns to deflect attention from growing problem

California’s fiscal watchdogs are bracing for the forthcoming press statements from the nation’s largest state-run pension fund, and from the public-sector unions that depend on the system to …

States still stuck when it comes to pension plan fixes

I spoke recently with Bill Howell, the longtime speaker of Virginia's House of Delegates. While he is not standing again for election, he is the kind of person …

Gov. Brown’s pension plan gets mixed reviews from reformers

Gov. Jerry Brown and the Legislature mostly have avoided tackling the state’s unfunded pension liabilities, even though these taxpayer-backed debts to pay for pension promises to state and …

Detroit and Puerto Rico: Which is the worse insolvency?

Over four decades beginning in the 1970s, the U.S. financial system had one big municipal debt crisis per decade.  These were New York City in the 1970s, the …

Forget fiscal responsibility: Jerry Brown embraces pension shell game

The Jerry Brown administration last week released its revised May budget and, lo and behold, it has finally decided to (kind of, sort of) tackle the state’s massive and growing …

UC’s Napolitano digs a deeper hole

University of California President Janet Napolitano, the former Arizona governor and secretary of Homeland Security under Barack Obama, showed off her political skill at a joint legislative oversight hearing last …

The Grass Gets Greener: New data tells old story of public-employee greed

Yet another prominent study highlights the depth of California's and the nation's pension crisis. The Pew Charitable Trusts recently released a report on the "state pension funding gap" — i.e., …

Puerto Rico’s inevitable debt restructuring arrives

"Debt that cannot be repaid will not be repaid" is Pollock's Law of Finance. It applies in spades to the debt of the government of Puerto Rico, which …

Yes, science, but how about a March for Math?

Tens of thousands of people marched in hundreds of cities last weekend as part of something billed as the March for Science. The event, which coincided with Earth Day, …

California high court sets stage for major pension ruling

The battle over reforming California's underfunded system of pension benefits does not involve any particular legislative proposal or initiative idea at this time, but is centered on a coming state …

State court punches union-backed ‘judge’ in the head

If you're wondering how far unions and California officials will go to kill any reform of the state's overburdened public-pension system, wonder no more: consider instead the final chapter in …

Massive road tax really is a pension tax

Gov. Jerry Brown and Democratic legislators have caused a stir with their plan to increase taxes to pay for the state's unquestionably decrepit infrastructure of roads and bridges. Instead of …

Kentucky’s new leadership tries to pull it back from the pension cliff

Having become the last legislative chamber in the entire South to flip to Republican control last November, the Kentucky House of Representatives wasted no time this session in …

Public employees — ever more untouchable

One of the most obnoxious trends in the nation, and one that is particularly acute in California, is the continued push to enshrine public employees as a special, …

Pollock before Oversight Subcommittee

Here's more from R Street Distinguished Senior Fellow Alex Pollock's testimony before the House Committee on Financial Services on the arbitrary and inconsistent non-bank SIFI designation process. https://youtu.be/hi6TnZ1kviw …

A flawed process generated by a flawed structure

Testimony to the Subcommittee on Oversight and Investigations U.S. House Committee on Financial Services Madam Chairman, Ranking Member Green and members of the Subcommittee, thank you for the opportunity to …

Wackiness aside, unions still our biggest problem

When non-Californians think about what’s wrong with our lovely but dysfunctional state, they tend to think of some of the wackier stuff that routinely makes headlines here. The …

Newport deal shows how pensions are rigged against taxpayers

  A former Newport Beach deputy police chief’s parting pension deal may be worth hundreds of thousands of dollars over the course of his lifetime — and serves as …

Moorlach wants to take pension reform back to the future

There isn’t anything fundamentally significant about 1990, from an ecological standpoint. Nonetheless, California officials long ago set that year as the benchmark against which greenhouse-gas-emissions reductions are judged …

California cities facing growing pension costs in new year

After two years of minuscule investment returns, the nation’s largest state pension fund – the California Public Employees’ Retirement System – has once again lowered its expected rates …

CalPERS considers – then rejects – efforts to end tobacco divestment

As the nation's largest state-based pension fund, the California Public Employees' Retirement System is known for using its massive investment muscle to promote various social-investment causes. So-called ESGs …

In California, an about-face on tobacco

The nation’s largest state-based pension fund, the California Public Employees’ Retirement System (CalPERS), has long been known for using its investment muscle to push for “socially responsible” investments …

When lunatics run the asylum, you get Monty Python

California’s pension funds continue to face a fusillade of bad news, including new reports showing that retirement benefits consume 20 percent of Los Angeles’ general-fund budget. Put another …

CalPERS staff nudges board to consider lower return rates

There’s bad news coming down the pike for California municipalities following several days of board meetings for the nation’s largest state-based pension fund. Although no action has been …

R Street’s priorities for the next administration

The incoming Trump administration will inherit numerous challenges that must be dealt with in year one, such as overwhelming shortfalls in the Pension Benefit Guaranty Corp. and debt …

Letter to Oversight Board of Puerto Rico

In response to your request for public comments on the draft Puerto Rico fiscal plan, I respectfully submit the following thoughts. An old friend of mine who ran a …

Barron’s Mailbag: Chapter 11 for Social Security?

In their Other Voices essay, Dudley Kimball and Robert Morgan said that Social Security will be insolvent in 2034. In the sense of having liabilities vastly greater than assets, …

States and cities are drowning in pension debts

One of the purest mysteries in public policy these days is that while there's a clarion call from every class of political leadership to do something about sea-level …

Union appeal focuses attention on pension precedent

A decision by four Marin County public-employee associations to appeal a pension-related case to the California Supreme Court could ultimately determine whether localities have the tools needed to rein …

At what point is California a lost cause?

A pseudonymous writer named Decius sparked a debate throughout the conservative media with his argument that this presidential election echoes “Flight 93” — the aircraft that crashed in …

Gov. Jerry Brown signs host of significant legislation

The 2016 legislative season is officially over, with Gov. Jerry Brown having signed 900 bills while vetoing 159 byFriday’s deadline. Some of the recently signed bills are far-reaching and will …

Ignoring pension past, state risks future problems

It’s one of the oldest ploys. After officials at a government agency or business are caught in an embarrassing situation, it’s typical for them to deny there’s anything …

Pension mess can’t go on; that’s no reason to ignore it

President Richard Nixon’s economic adviser, the late Herbert Stein, still is known for his dictum: “If something cannot go on forever, it won’t.” It should be the rallying …

Suddenly, a shifting pension paradigm?

Last month, I wrote a dour column for the Spectator doubting that a significant new appeals court decision in a major pension case would ultimately change the financial …

Court ruling opens avenue for pension reform

An Aug. 17 California appeals court ruling rejected a public employee union’s claim that its members had a right to “pension spiking,” which the court described as “various …

Will appeals ruling sober up state’s pension abusers?

California’s hardy band of pension reformers show many of the symptoms of “battered spouse syndrome.” No matter how often they are beaten and ridiculed, they cling to hope. …

Iron Chancellor was a good actuary too

Sir, “Retirement age for young Germans will have to rise to 69, central bank warns” (Aug. 16). That is a quite reasonable, even generous, retirement age if you …

Who will pay for the Pension Benefit Guaranty Corp.’s huge losses?

The government's pension insurance company, the Pension Benefit Guaranty Corporation (PBGC), is broke. Because its creditors can't demand their money immediately, it won't have spent its last dollar for …

CalPERS’ earnings flop means belt tightening

Earlier this year, I watched in horror as my 401(k) earnings started a freefall right before I planned on shifting some assets into a lower-risk fund. Things corrected, …

R Street and Americans for Tax Reform urge the Senate to pass H.R. 5278 (PROMESA)

June 21, 2016 Dear Senator, On behalf of the undersigned free market organizations, we urge you to vote “Yes” on the House-passed H.R. 5278, the Puerto Rico Oversight, Management, and …

Lavish pension hikes cause of O.C.’s exploding debt

The Orange County Grand Jury’s report on the state of the county’s pension plans painted a bleak but not unexpected snapshot of a challenging long-term fiscal situation. The …

The PBGC: A broke insurance company sponsored by your government

Imagine an insurance company with assets of $88 billion, but liabilities of $164 billion. It has a huge deficit: a net worth of a negative $76 billion, and …

Time for Congress to vote in the new Puerto Rico bill

A revised bill to address the intertwined debt, fiscal and economic crises of Puerto Rico has just been introduced in the U.S. House. H.R. 5278 proposes "to establish …

Citizens’ anger is palpable, global, often misdirected

An awesome 6.7 percent of Iceland's resident population took to the streets last month to demand the resignation of their prime minister. The rallying cause was his perceived …

Puerto Rico: A big default—what next?

Rexford Tugwell, sometimes known as “Rex the Red” for his admiration of the 1930s Soviet Union and his fervent belief in central planning, was made governor of Puerto …

Shareholders continue to be misinformed about the costs and benefits of proxy access

The California Public Employees' Retirement System (CalPERS) and the New York City Comptroller’s Office both continue to use a deeply flawed CFA Institute report as support for their …

Pollock talks Puerto Rico on CCTV

R Street Distinguished Senior Fellow Alex Pollock was interviewed in a recent segment by CCTV America on the Puerto Rican debt crisis and steps Congress should take to …

Is Jerry Brown California’s savior?

It may be news to many of us living here, but California — according to a recent Newsweek issue — apparently no longer faces intractable budgetary, debt, infrastructure, business, …

California’s pension hubris

Instead of addressing the estimated $600 billion in unfunded liabilities in California’s beleaguered public-employee pension system, Democrats in Sacramento have instead decided to “solve” a growing pension crisis …

Puerto Rico: Time for Congress to act

The finances of Puerto Rico's government are unraveling rapidly. With the commonwealth government broke and scrambling, its Legislative Assembly already has empowered Gov. Alejandro García Padilla to declare …

On Puerto Rico, Congress is moving in the right direction

The draft bill to address Puerto Rico’s debt crisis – released late last week by House Natural Resources Committee Chairman Rob Bishop, R-Utah – marks a step in …

Your retirement dream may require working much longer

A recent Citigroup monograph, "The Coming Pensions Crisis," begins with some questions very much in the spirit of our time:  “What’s your dream for retirement?  Is it living …

A few crumbs for private workers

California’s Democratic leaders announced a “landmark deal” Monday to raise the minimum wage to $15 an hour by 2022. Yet it may be overshadowed by another milestone from …

Reimagining retirement for the gig economy

The emergence of the so-called “gig economy” – employment situations in which a worker may spread his or her labor among several part-time or freelance arrangements with several …

California already is building a wall — of debt

During a speech Monday to union organizers at a Sacramento dinner, California Gov. Jerry Brown made one of his characteristic off-the-cuff jokes. “If (Donald) Trump were ever elected, …

Puerto Rico needs a financial control board

The government of Puerto Rico is broke. Having run a long series of constant budget deficits, financed by escalating borrowing, it has accumulated about $71 billion in debt …

Public-pension funds play with newest toy in corporate governance

Shareholder-wealth maximization generally is accepted as the default objective of an investment fund, though there are exceptions to the rule. For example, an investment adviser might create a …

Resisting automatic savings

The automatic enrollment of new employees into a company’s 401k pension plan has gone from a niche policy to the mainstream in just a few years. Today, a …

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