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Ignoring Pension Past, California Risks Future Problems: New at Reason

Friday, October 7, 2016 8:19
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Lawmakers in California don’t want to re-litigate past mistakes even as they’re certain they’re not making them anymore.

Steven Greenhut writes:

CalPERS—which in 1999 claimed the pension boost (Senate Bill 400, which had then-Assemblyman Lou Correa of Santa Ana as a principal co-author) would pay for itself through continuing stock-market increases—came back with a rebuttal this past week.

Referring to “the recent back-and-forth debate over pensions,” three of its officials warned against falling “into the tired trap of looking back: It’s time to put SB 400 [behind us.] Retirement security is too important today to get caught in a debate about the past.” How convenient for an agency that has for years been denying major pension-debt problems that it should now want to avoid talking about that history.

Sorry, but the past debate is crucial, and not just because California taxpayers will eventually be forced to clean up the mess caused by years of miscalculation and, yes, greed. Thanks to Gov. Jerry Brown’s signature Thursday on Senate Bill 1234, the state is moving forward rapidly on a new “Secure Choice” retirement program for Californians that is designed to be something of a state-run mini-Social Security system for private workers. CalPERS is on the sidelines of this debate, but it could play a key role in investing the dollars deducted from employees’ paychecks.

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