Re "Brown's pension plan no panacea," News Analysis, Aug. 30
Although you admit that Gov. Jerry Brown's pension reforms will save billions, your analysis supports going much further because of "runaway" pension costs. But the numbers that your experts cite are vastly exaggerated. They reject public pension accounting standards and are instead based on "market values," what a fund would get if all its assets were immediately sold — which no fund would or could do.
Others advocate reducing assumptions to discount bank rates. But that would increase unfunded liabilities until employers go bankrupt — which may be the point. Then the financial services industry could replace pensions with 401(k) plans and rake in exorbitant fees. Meanwhile, ordinary Californians face the prospect of retiring into poverty or working until they die.
Your analysis simply encourages a race to the bottom. Pensions work. They are fair, and more people should have access to them.
Shame on Brown. His agreement with state legislative leaders on public sector pension reform smacks of rearranging the deck chairs on the Titanic.
His relatively minor adjustments to the grossly underfunded public pensions puts the financially overwhelmed private sector worker at great risk of paying a large amount to fund the public sector worker's comfortable retirement, independent of the happenings in the financial markets. This wealth transfer from the private sector to the public sector worker is unfair.
Brown should be representing the interests of all Californians, not just the public sector and its powerful labor unions.
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