Neil Rubenstein takes another swipe at public employees in his column (1/30 – 2/5/’14). He reports Treasurer Bill Lockyear’s observation that the state has “a $5 billion annual shortfall in its funding obligation for retired school educators.”
However, he fails to present the full context of Mr. Lockyear’s comments as reported recently in the Camarillo Acorn. More fully, Lockyear says “the teacher retirement system in 30 years implodes if it doesn’t get fixed.” He further stated that the pensions of teachers are “commitments we have to keep.”
The trouble with a column based upon factoids and anecdotes is that it has no real news value, if the function of the news (even in an editorial format) is to inform readers with full information. Further, to use the retirement fate of thousands of California’s dedicated teachers whose very modest pensions reflect foregone earnings and dedicated service, to push a notion that taxes will go up in the state because of a 30 years-down-the-road projected “implosion” at CalSTRS is very sad, indeed.
Like other public pension funds in the country, STRS lost about 25% in its investment portfolio in the wake of the market crash in 2008, the same market Mr. Rubenstien has proposed in other columns to set public employees adrift in risky self-directed investments in 401K-type accounts, rather than defined benefit pensions, such as STRS. Under current law, the state funds a 5% contribution to teachers’ pensions, while teachers pay 5%, and school districts pay 8.25%. This formula can be changed only by action of the legislature.
Governor Brown has made a number of pension reform proposals, none of which is to raise taxes, and these await legislative action. It is likely that teachers’ contributions will be increased; it is unlikely that taxes will be assessed to pay for sustaining STRS. In fact, Brown has said, recently, that “the state’s long-term role as a direct contributor to the plan should be evaluated.”
Facts in context matter.
Bruce Lebedoff Anders