Posted by Ray Haynes at 12:00 am on Oct 15, 2009 Comments Off on The CalPers $100 Billion Disaster
In 1996, then Assemblyman Howard Kaloogian introduced a bill
that would give public employees the option of moving from the
current "defined benefit" pension system to a "defined
contribution" system. The major difference between the two
system is that under a defined benefit system, the contributions
are made to a fund, managed by someone else (in Californias case, a
union elected board, with a couple of Governor appointees and
appointees by the Controller and Treasurer, both union controlled
Democrats), and the payment that is made to the retiree is defined
by the state. A defined contribution system is a 401(k)
system. It allows the investments to be controlled by the
employee, and the benefit the employee receives depends on how
smart the employee was in making the investment.
Kaloogians bill passed the Republican controlled Assembly at the
time, and ended up in the Democrat controlled Public Employee
Retirement Committee, of which I was the Vice Chair. A whole
host of government employee union lobbyists (a group I used to
refer to as the "Red Brigade") showed up in the committee to oppose
the bill. What was most interesting… Read More