(Sacramento, CA) — The Service Employees International Union (SEIU) California released the following statement from Eric Banks, President of SEIU Local 221 in San Diego on a web broadcast from the Legislative Analyst’s Office with recommendations to restructure California’s public employee retirement system:
“The LAO confuses the picture by misstating the problem and pointing to false solutions by repeating disproven assertions that retirement formulas are too generous.
“Every credible study shows public employees’ compensation lags behind private sector counterparts even when retirement earnings are figured in.
“Here are the facts:
- The National Institute on Retirement Security estimates that defined benefit plans produce 46 percent savings for taxpayers, because they cost slightly less than half as much as defined contribution plans (like risky 401Ks) when considering all factors including administrative costs and investment returns.
- Public employee pensions in California aren’t excessive. The truth is, seven out of 10 public employees receive retirement income of less than $2,500 a month, and many public employees don’t receive Social Security or retirement health care benefits.
- Many public employee groups have stepped up to help keep CalPERS strong and viable. SEIU Local 1000, which represents 95,000 state employees, recently agreed to a 60 percent increase in employee contributions to CalPERS.
“Most troubling, in the wake of the Great Recession that wiped out the retirement savings of millions of Americans, the LAO recommends putting even more workers at the mercy of the economic cycle, advocating a move away from the proven savings and stability of defined benefits plans to individual accounts with higher fees and much greater risks.
“Like all hard-working Californians, public employees such as nurses, school employees, college professors, and child protection workers want our retirement to be secure – so we support reforms to make the system strong and sustainable. The starting point for any reform effort should be to end the abuses that are found at the top of the pension scale: double-dipping, spiking, and over-the-top managerial pensions.
“After a lifetime of hard work, everyone deserves a secure retirement. Instead of talking about how to take retirement security away from those who have it, we should be trying to make sure all working people can retire with dignity and security.”