Published: Sunday, April 8, 2012 at 11:00 p.m.
Last Modified: Sunday, April 8, 2012 at 10:13 a.m.
EDITOR: I would hope the city of Petaluma does more than just “look at pension reform.” CalPERS is bankrupting the 482 cities in California, along with all the counties and the state itself. It’s an absurd and corrupt system and completely unsustainable. What most California taxpayers may not realize is that the “unfunded pension obligations” come about because of the bad investment decisions of PERS trustees and investment advisers.
When the California pension system was first established, investments were restricted to bonds only — a safe, secure investment. Then investments were expanded in 1966-67 to allow 25 percent of the portfolio to be in the stock market, then in 1984 the 25 percent limitation was removed. Two of PERS’ worst investments were in Enron and Worldcom.
PERS lost $67 billion in stock market investments in the two-year period 2008-2009. So when the fund makes bad investment decisions and loses money, the taxpayers are expected to increase their contribution to make up for those losses, thus the millions of “unfunded pension obligations.”
I know of no other pension plan on the planet where the employer (i.e., the taxpayers of California) is obligated to make up for investment losses when those responsible for making those investment decisions on behalf of the pension plan make bad decisions.
Any employed person in the private sector fortunate enough to have an employer-paid pension plan has lost on average 40 percent of his retirement plan in this economy and can certainly not direct his employer to increase the contribution to make up for those losses caused by bad decisions of the portfolio managers.
PERS is a corrupt system and it may take a taxpayer revolt to get it corrected. So why don’t California legislators correct the problem? It’s because they are heavily supported by public employee unions and don’t want to lose that support. So California’s taxpayers, cities, counties and the state itself get thrown under the bus for the sake of these unions and PERS.
I support a taxpayer revolt.
JANNA NIKKOLA, Novato
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