Bob Deis penned an interesting piece for the Sacramento Bee:
“Virtually all local government employees in California are receiving a CalPERS or similar pension plan. How many large employers can ignore their de facto labor market standard and recruit substandard compensation? Knowing this, Stockton pursued a surgical plan that cut employee pay by 9 to 23 percent, completely rewrote labor contracts to save millions, and eliminated retiree medical benefits. We also restructured the massive debt the city owed and the financial service companies screamed about it, as have their allies at Moody’s. But what they ignore is that employees gave up 34 to 70 percent of their future retirement packages, depending on when they were hired. Many retirees gave up 34 percent of their retirement package, and many of them are not eligible for Social Security. What more do people want from them, and why?”
The city’s bankruptcy trial is scheduled to resume Oct. 1. Judge Christopher Klein is contemplating whether Stockton should “impair” its CalPERS contract as part of its plan to exit bankruptcy. The city did not alter its obligations to CalPERS in developing its Plan of Adjustment. Officials have said that if Stockton terminates its CalPERS contract, it could cost the city $1.6 billion.
Read Deis’ entire column here.