"Simply put: the new retirement healthcare contribution is the result of our Union leadership’s failure to be steadfast in fighting for us."
Many people believe that public sector unions and their pensions are too expensive and should not be guaranteed through a defined benefit plan but should instead be a defined contribution plan such as a 401(k). I strongly disagree, and I also disagree with pre-funding our retiree healthcare costs. The reality is we, as State employees, have sacrificed enough over the years through furloughs and PLPs while under signed contracts. We did not make the bad investments that have wreaked havoc on CalPERS.
The costs of pensions across America have skyrocketed over the years with pension unfunded liability rising in dramatic fashion. However, Local 1000 represented employees have been guaranteed healthcare upon retirement by California Government Code §2287(a)(b), which states that medical costs in retirement are guaranteed to be paid by the State unless the State and a union agree to negotiate this matter.
Simply put: the new retirement healthcare contribution is the result of our Union leadership’s failure to be steadfast in fighting for us.
Another failure: The 2010 contract that resulted in employees giving up one day’s pay per month for a year (2010 PLP) and then, at the urging of Local 1000 leadership, giving another one day’s pay per month for a year (2012 PLP) while still under a signed 3-year contract from 2010.
Most State workers continued to contribute 5 percent of their pay to CalPERS, and others as much as 8 or 9 percent. Remember that in our 2010 contract, we agreed to increase our pension contributions to 8% (up from 5% previously) during the furlough fiasco before Governor Brown assumed office after being elected in November 2010.
Local 1000 represented employees have been led to believe that pensions are too costly and that we are responsible for this high cost. This is simply not true. We continued to pay our share while the State went on a contribution “holiday” for two years. The State failed to plan for the years of lean investment returns and is ultimately responsible for any pension funding deficiency.