Only government-employee union officials at this point are denying the reality of California’s pension crisis, as public pension debts estimated as high as a half-trillion dollars are crushing state and local governments and threatening to increase the burden on already hard-pressed California taxpayers. Meanwhile, the disparity keeps growing between government employees, who retire with guaranteed cost-of-living-adjusted benefits that too often top $100,000 a year, and private-sector employees who must rely on 401(k)-style plans supplemented by the increasingly shaky Social Security system.
This problem didn’t happen by accident, and the worst pension expansions and abuses have taken place in the past decade – in California, in particular, since the 1999 passage of Senate Bill 400, which greatly expanded pension benefits across the state. Indeed, the well-respected and nonpartisan Little Hoover Commission released a report in February explaining that 200 public agencies increased pension benefits “in the months since the steep decline in the stock market and housing values in 2008. … Up and down the state, cities, counties, and fire and water districts rewarded employees with ‘golden handshake’ agreements that provide extra service credit to retire early; introduced favorable methods to calculate pension benefits based on the single highest year of compensation; and lowered retirement ages.”
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