Here’s how the L.A. teachers’ strike is part of California unions’ pension preservation plot
In August 2009, at a seminar in Sacramento sponsored by the Public Retirement Journal, the chief actuary of the California Public Employees’ Retirement system — who thought he was at a closed event with no media present — made a grim, startling pronouncement that was unlike anything ever said publicly by his bosses at CalPERS. Ed Mendel, founder of the Calpensions blog, was at the event, and broke the story that’s reverberated ever since.
“I don’t want to sugarcoat anything,” [Ron] Seeling said as he neared the end of his comments. “We are facing decades without significant turnarounds in assets, decades of — what I, my personal words, nobody else’s — unsustainable pension costs of between 25 percent of pay for a miscellaneous plan and 40 to 50 percent of pay for a safety plan (police and firefighters) … unsustainable pension costs. We’ve got to find some other solutions.”
Seeling used the same word to describe CalPERS’ pension costs — “unsustainable” — that then-Gov. Arnold Schwarzenegger had used to push for dramatic cuts in pension benefits. No one had more credibility than Seeling on CalPERS’ financial health, and 10 years ago, it was clear that he had joined the doomsayers who warned the “pension tsunami” would eventually strike with devastating effect.
Unsurprisingly, with its board dominated by union allies who defended the pension status quo, CalPERS quickly disavowed Seeling’s warning. The next month, it launched a website — calpersresponds.com — that rejected any concerns about CalPERS’ long-term viability. And ever since, public employee unions have mounted campaigns dismissing the idea that a pension crisis is coming — even as local governments eliminate or reduce services because of pension costs.
But union leaders are anything but dumb. The most telling example: Four years before the June 2018 U.S. Supreme Court ruling saying public employees could opt out of paying union dues, the California Teachers Association had actually concluded the ruling was inevitable and started preparing for a future in which government worker unions would have diminished resources.
Related (2009): The Madison School District as General Motors.
