Labor Deals with City Unions Not Helping Reduce Pension Obligations.

To the editor:

(The following statement was delivered to the La Mesa City Council at its June 28 meeting.)

I notice that the changes made to this year’s MOUs [with city employee unions] do nothing more to reduce our pension obligations. I’m disappointed! Our city has a $31 million unfunded liability to the CalPers pension system. Our pension payments, with Social Security included, exceed $6 million—and they are projected to increase in the out years.

While you have made token changes to pensions for new hires and I believe a relatively small “extra” payment against the liability, I have seen or heard nothing about a plan to make us healthy and keep us that way. If I missed something, please let me (and the rest of the public) know what it is.

I know you all read the Little Hoover Commission report about the California pension situation, so please bear with me while I read one short quote:

California’s pension plans are dangerously underfunded, the result of overgenerous pension promises, wishful thinking and an unwillingness to plan prudently. Unless aggressive reforms are implemented now, the problems will get far worse, forcing counties and cities to severely reduce services and layoff employees to meet pension obligations.

I believe one could accurately insert La Mesa in place of California in that scary prognosis.

Fundamental fairness dictates that you bring the pensions enjoyed by our public-sector employees in line with pensions provided to those who pay for them. The Wall Street Journal, on June 14th, ran a front-page article: “Retirement Plans Make A Comeback.” It referred, of course, to private-sector plans.

The article used UPS as an example. UPS reinstated its 401k match in January, after having suspended it altogether in 2009. Their restored pension plan is a 401k match of half of what an employee contributes up to 5% of salary. Thus UPS pays a maximum of 2.5% of salary into its pension plan. Add to that the 6.2% for Social Security and total pension cost to UPS is a maximum of 8.7%

You force the taxpayers of La Mesa contribute three times that much to city employee pensions. Doesn’t something strike you as being way out of balance?

Both fundamental fairness and our budget predicament are screaming for significant reductions in pension costs and, equally important, pension risk.

I suggest that you vote down these MOUs and include pension programs much more fair and much more affordable and much less risky.

I also suggest that instead of traveling to conferences of questionable value to our city, you travel to Sacramento and let our legislators know how badly we need authorization to change our pension program for current employees going forward.

Finally, I suggest that you set the example for our city by implementing the Little Hoover Commission recommendation that elected representatives not receive pensions.

Russell Buckley, La Mesa