Presentation on theme: "CalPERS Glendale’s Unsustainable Pension Burden. Unsustainable Benefits? Glendale taxpayers guarantee a 7.75% return on CalPERS investments When bad investments."— Presentation transcript:
Unsustainable Benefits? Glendale taxpayers guarantee a 7.75% return on CalPERS investments When bad investments tank, the taxpayer pays for their mistakes (Budget cuts, service cuts and increased utility rates) When the economy tanks, the taxpayer pays again. But increase the payroll or the benefits and the future obligation rise steadily
Budgeted Pension Expenses for General Fund (in millions)
Pension Increases to Uniformed Emp. California Governor Gray Davis Increased benefits in 1999. Glendale City Council Increased Benefits in 2001 to Fire and Police Associations. Over 6,000 people now receiving pensions in excess of $100,000 from CalPERS California’s Budget can’t be balanced Likewise Glendale’s Budget now has unsustainable obligations.
Pensions based on Bubble Gov Davis acquiesced to political pressure High stock price increases were highly speculative and P/E multiple unsustainable Core economics of price/earnings ignored. Long-Term permanent pension decisions based on unsustainable economic trends. Glendale Councilmen persuaded to follow California’s lead.
Urgent Long-term solution Rescind 2001 & 2005 Pension scheme. Defined contribution not defined benefits Highest pension s/b Median family income All employees should get same pension plan City should not guarantee CALPERs returns. If Employee Unions uncooperative: Contract with County for Fire Services Contract with private Paramedic Svcs Have County provide law enforcement.