Another CalPERS Disaster: LA Works retirees’ pensions are slashed; state must act

One way or another we are now watching the collapse of the CalPERS pension system.  Retirees from Loyalton, California have had their pensions cut by 60%.  Now another system, former employees of LA Works, are in the same boat.  If they had been allowed a 401 (k) program, they would lose nothing.  But, unions demand no choice for workers—in anything—pay them a bribe or you do not work.  This is a growing problem—ignored by most of the media.

“non-executive jobs, the money that was promised to them once they had retired is very much a part of their compensation package.

And when those promised modest pensions are slashed for average workers by about two-thirds through no fault of their own, as they have for hundreds of former workers at the now-defunct East San Gabriel Valley job-training agency LA Works, it’s a real human tragedy.

No fat cats here. Former LA Works employee Maureen Lynch, 67, lost about 63 percent, or $1,100, of her monthly retirement income when LA Works went under and stopped paying into the system. She lives full time in her recreational vehicle.

Who is looking out for the workers?  Not the unions, they already stole the workers money and not the Democrats running California—they are totally silent.

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LA Works retirees’ pensions are slashed; state must act: Editorial

Sandy Meza, with her husband Miguel, at their home in Chino. Sandy Meza’s CalPERS pension was cut by 63 percent after the LA Works job training agency where she worked for decades went under.

By The Editorial Board, The San Gabriel Valley Tribune, 8/18/17

Properly penny-pinching Californians reserve much of their ire about profligate government spending for former public employees now apparently living high on the hog thanks to their bloated pensions.

That anger almost always comes from those in the private sector, where employer-backed pensions have become almost nonexistent in recent decades. Fewer and fewer companies even pay into the 401(k) accounts their employees can set up for tax-free payroll deductions going into investment funds to be accessed in their retirement years.

But properly charitable Californians also mostly aim their concern about fat-cat pensioners at “the system,” not at the outlier individuals who score six-figure pensions after retiring from their government jobs.

The fact is, most pensions are nowhere near that high. Especially for the majority of workers in non-executive jobs, the money that was promised to them once they had retired is very much a part of their compensation package.

And when those promised modest pensions are slashed for average workers by about two-thirds through no fault of their own, as they have for hundreds of former workers at the now-defunct East San Gabriel Valley job-training agency LA Works, it’s a real human tragedy.

No fat cats here. Former LA Works employee Maureen Lynch, 67, lost about 63 percent, or $1,100, of her monthly retirement income when LA Works went under and stopped paying into the system. She lives full time in her recreational vehicle.

The problem is that though the cities of West Covina, Azusa, Glendora and Covina created the joint-powers authority in 1979 with the admirable charge of training the unemployed in the San Gabriel Valley, including prison inmates before their release, they technically aren’t responsible for the welfare of the employees after LA Works was dissolved in 2014 after Los Angeles County pulled its funding during a billing dispute.

Though it’s only the second time in history that CalPERS was forced to dramatically reduce pensions due to a default, it’s a cautionary tale for California’s 170 other joint-power authorities. Cities should not be allowed to form them, no matter how good the cause, without promising to take on their obligations if they are dissolved. The state must act to prevent this from happening again.

 

About Stephen Frank

Stephen Frank is the publisher and editor of California Political News and Views. He speaks all over California and appears as a guest on several radio shows each week. He has also served as a guest host on radio talk shows. He is a fulltime political consultant.