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According to the publication PublicCEO.com, Pew Center on the States has issues a report on healthcare funding of 61 U.S. cities. The shortfall for retiree healthcare is $118 billion, higher than the shortfall for pensions, $99 billion. San Diego's plan is only 3% funded. San Jose's is 9%, San Francisco's less than 1%, and champion Los Angeles's 55%. Yet politicians and the media spend more time fretting about pension deficits.

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Don Bauder Feb. 9, 2013 @ 12:18 p.m.

SurfPup: True, but let's be fair. Private sector pension funds are underfunded, too, and I would guess that health care funds are, too, although hardly to this extent. Corporate pension funds have just as rosy a view of future returns (8% annually or more) as governments do. In fact, these comparables inhibit doing anything about government excesses. We can complain about a firefighter retiring at 55 and getting an annual pension of $125,000, but firefighters can point to CEOs retiring for several million a year plus insurance plus airplane plus condo plus automobile plus huge stock ownership, ad nauseam. Best, Don Bauder

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SurfPuppy619 Feb. 9, 2013 @ 3:43 p.m.

Don, yes, lets be fair, NO WHERE in the private sector can you receive LIFETIME health care after just five (5) SHORT years of employment like you can in gov, or at the most 10.

In fact I don not think ANY company outside the Fortune 50 gives ANY health care after you leave, no matter how long you have worked for them.

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Don Bauder Feb. 9, 2013 @ 10:23 p.m.

SurfPup: I can't think of any examples off the top of my head, but I think you are wrong on that one. Corporate CEOs, COOs, CFOs get incredible retirement benefits, including yearly stipends in the millions of dollars. I can't imagine that lifetime healthcare is not included in some deals. In any case, they get so much cash they don't need lifetime healthcare. Best, Don Bauder

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SurfPuppy619 Feb. 10, 2013 @ 12:30 a.m.

I am talking about everyone including all rank and file employees, and that is what gov offers. Vallejo and Stockton BOTH gave LIFETIME medical after just 5 years of muni employment, and that was to everyone, ALL the employees. They could not afford it and the taxpayers, already making LESS, should NOT be forced to pay for it as they get nothing even remotely close.

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Don Bauder Feb. 11, 2013 @ 2:41 p.m.

SurfPup: There is no doubt that pensions, including benefits, of rank and file government workers, particularly in so-called safety services, are far too high. No argument there. I am just saying that the stupefying pay and fringes of top corporate officials inhibit us from pointing to the excesses in the public sector. Best, Don Bauder

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ImJustABill Feb. 9, 2013 @ 10:40 p.m.

Wrong + wrong does not equal right. But that's how a lot of these guys get their bases to support them. There is SO much corruption and greed on both sides that one side can always point to greedy crooks on the other side while protecting their own greedy crooks. When Republicans start aggressively going after corporate greed and Democrats start aggressively going after union greed we might start seeing things get better.

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Don Bauder Feb. 11, 2013 @ 2:43 p.m.

ImJustABill: In San Diego, two Democrats, Donna Frye and Mike Aguirre, dared to go after union excesses. Look what happened. Best, Don Bauder

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JustWondering Feb. 9, 2013 @ 1:48 p.m.

It was the City leaders who wanted out of Medicare and Social Security in 1981 under the leadership of Pete Wilson and then City Manager Ray Blair. Their choice was to use the pay-as-you-go plan rather than prefunding the costs of retiree healthcare. Managers and Mayors who followed made the situation worse by stealing what they labelled as pension system excess earnings, i.e. "the waterfall" to fund the costs. (We all know now there are no such things as excess earnings for pension systems.) Fast forward to 2011, 30 years after the 1981 agreement and after the IRS told the city the taking of earnings from SDCERS was illegal. The city negotiated changes to OPEBs with its labor groups and finally addressed this issue with some sort of fiscal sanity. 3% funded is a good start for a plan that is 30 years late.

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Don Bauder Feb. 9, 2013 @ 2:13 p.m.

JustWondering: The waterfall was one of the local pols' biggest mistakes. Best, Don Bauder

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Visduh Feb. 9, 2013 @ 2:26 p.m.

An interesting axiom: "there are no such things as excess earnings for pension systems." If a pension system is indeed a system that will go on indefinitely, adding new participants, paying benefits to retirees for as long as they live, and managing a pool of invested funds, the ultimate long-run view is that there are no excesses. When the city saw a few good years that most financial gurus said could not be sustained and decided that the pension was overfunded and that it could sharply curtail or stop contributions, ruin was not far away. In a situation where a pension system is serving a steadily diminishing number of participants, and if over a period of at least a decade the funds grew faster than the actuarial liabilities, it might be appropriate to conclude that contributions could be curtailed or eliminated. Otherwise such moves will prove disastrous due to their overoptimism.

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SurfPuppy619 Feb. 9, 2013 @ 3:48 p.m.

Vis, excellent comment, 100% on the money, can you please RUN for office fix this cluster**** we are in.

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Visduh Feb. 9, 2013 @ 8:10 p.m.

On occasion I've considered running for office. In addition to my innate laziness, I'm a rather private person, and at my age, the notion of upsetting my carefully-crafted retirement to "straighten things out" doesn't appeal. There must be others out there, many years my junior, who have a need to make their marks, who could/should run for office. Unfortunately, few of them can afford the time and loss of income, almost always as underpaid minions in the private sector, to run for office. That may be why we have such rotten political leadership now.

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SurfPuppy619 Feb. 10, 2013 @ 12:32 a.m.

I'm a rather private person, and at my age, the notion of upsetting my carefully-crafted retirement to "straighten things out" doesn't appeal.

Only a fool would want the brain damage it would take to run and fix the mess.....don't blame you.

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Don Bauder Feb. 10, 2013 @ 7:05 p.m.

SurfPup: First you tell Visduh to run, and then you retract your statement. That's like purported expert advice pols get all the time. In most cases, they choose the side that offers the most money. Best, Don Bauder

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Don Bauder Feb. 10, 2013 @ 7:03 p.m.

SurfPup: Visduh would shake things up. See if you can get him to run. Best, Don Bauder

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Don Bauder Feb. 9, 2013 @ 10:24 p.m.

Visduh: You are absolutely correct, and that is what consultants hired to assess the San Diego damage concluded right away. Best, Don Bauder

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SurfPuppy619 Feb. 9, 2013 @ 3:46 p.m.

JW, the underfunding was a PART of the problem, but the Jack up in benefits, retroactively, TWICE, were the real deal breakers though.

But I cannot disagree, by not pre funding the system it was destriyed and that should be illegal, and until we can STOP politicians from making promises that THEY DO NOT HAVE TO KEEP, it will continue to be a problem.

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Don Bauder Feb. 9, 2013 @ 10:26 p.m.

SurfPup: Golding stole from the pension fund to help pay for the 1996 Republican convention. The employees went along but then demanded the excessive benefits in return. Best, Don Bauder

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ImJustABill Feb. 9, 2013 @ 3:57 p.m.

Defined benefit plans WOULD be OK if reasonable assumptions (e.g. maybe 5% investment returns, rising healthcare costs, etc) were used. Of course, it's a lot easier to just make bogus assumptions and kick the can down the road. The shenanigans that went on with underfunding the pensions were of course, even worse than the normal kicking the can down the road.

I think the defined benefit plans for public employees need to end - it's impossible to make any reasonable apples/apples comparison w/ non-defined benefit private sector compensation plans.

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SurfPuppy619 Feb. 9, 2013 @ 9:07 p.m.

Defined benefit plans WOULD be OK if reasonable assumptions (e.g. maybe 5% investment returns, rising healthcare costs, etc) were used. Of course, it's a lot easier to just make bogus assumptions and kick the can down the road.

DB's will NEVER work until politicians are forced to pay today the debts they incur today, and that is why DB's are doomed to failure, a politician can promise the world and KNOW he will never be around to be forced to pay for it.

There was an excellent expose on this very issue recently, will try to find it.

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Don Bauder Feb. 10, 2013 @ 7:39 a.m.

SurfPup: I think defined benefit plans will be phased out over time, even in government. Best, Don Bauder

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Don Bauder Feb. 9, 2013 @ 10:28 p.m.

ImJustABill: The private sector is phasing out defined benefit plans, going for defined contribution plans. Governments have been slow to do this for obvious political reasons. Best, Don Bauder

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ImJustABill Feb. 9, 2013 @ 3:59 p.m.

Will be interesting to see how the San Bernardino bankruptcy turns out...

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SurfPuppy619 Feb. 9, 2013 @ 4:36 p.m.

Calpers will be taking a haircut, I guarantee it, SB has no $$$$.

That will in turn open the flood gates. I predict that once that happens just the THREAT of a BK will force public unions into confessions on every issue, including changing the pension formulas for years not yet worked.

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Visduh Feb. 9, 2013 @ 8:14 p.m.

Wow! "Confessions". The unions confess their sins of avarice, greed and gluttony, and all will be better. (SurfPup, ya' gotta check your typing before you "Post Reply.") I'm rolling on the floor. Whooee.

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SurfPuppy619 Feb. 9, 2013 @ 8:56 p.m.

I meant CONCESSIONS!!!

I now have a spell checker, for the blogs, it works great (as many of you must have noticed) but sometimes the WRONG word gets changed in the spell check process.

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Don Bauder Feb. 9, 2013 @ 10:35 p.m.

SurfPup: I don't think your spell checker will realize you meant concessions, and not confessions. Best, Don Bauder

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aardvark Feb. 10, 2013 @ 11:24 a.m.

Maybe, deep down, he MEANT confessions.

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Don Bauder Feb. 10, 2013 @ 7:07 p.m.

aardvark: Those who make confessions soon make concessions. Best, Don Bauder

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Don Bauder Feb. 9, 2013 @ 10:33 p.m.

SP: It appears that we are coming to an important threshold in this issue. We were talking about it nine years ago, but it didn't come. Maybe this time. Remember, though: judges are government employees who may have excessive pensions. Best, Don Bauder

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ImJustABill Feb. 9, 2013 @ 10:35 p.m.

Yes - ultimately not having any money is the ultimate bargaining chip in a negotiation.

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Don Bauder Feb. 9, 2013 @ 10:37 p.m.

ImJustABill: Bankruptcy should be the ultimate bargaining chip but some cities have refused to push the pension issue to the brink during BK proceedings. Best, Don Bauder

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Don Bauder Feb. 9, 2013 @ 10:30 p.m.

ImJustABill: Some city in the tank has to challenge the ridiculous notion that excessive pension benefits are untouchable even when cities can't pay for them. Best, Don Bauder

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JustWondering Feb. 10, 2013 @ 8:37 a.m.

I thought this thread was about retiree medical insurance benefits or OPEBs, not DB pensions. Regarding the LA funding ratio, how did they get their 55% funded level? Was a factor of time or a combination of something else? It seems we need to know more if, in fact, it is a reasonable model to follow.

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Visduh Feb. 10, 2013 @ 2:48 p.m.

These comments get discursive and can wander around. You make a good point about LA. That city is not noted for its financial strength, discipline, and solidity. Actually it isn't noted for many things that are good. It is well known for many things that are bad, often very bad. So, how did it get that figure to 55% and lead that list? There is more to the story I think.

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Don Bauder Feb. 10, 2013 @ 7:13 p.m.

Visduh: To start, maybe I can post the Pew study. Best, Don Bauder

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SurfPuppy619 Feb. 10, 2013 @ 5:36 p.m.

I thought this thread was about retiree medical insurance benefits or OPEBs,

Tomatos, Tamatos, they are all related JW.

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Don Bauder Feb. 10, 2013 @ 7:09 p.m.

JustWondering: The blog started out discussing healthcare and veered into pensions. I don't have a problem with that. Best, Don Bauder

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Don Bauder Feb. 10, 2013 @ 7:12 p.m.

JustWondering: I agree that the subject needs more investigation. I put it on the blog to get it up there, figuring it can be explored in depth later. Already, we have had some illuminating information, including some posted by you. Best, Don Bauder

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