More California Idiocy -- Calpers Scam to Run Private Pension System
A new California mandate on employers I completely missed:
California Governor Jerry Brown signed a law that permits as many as 6.3 million private workers without a pension plan to set aside retirement money for management by the state.
It is the first state-run pension program for nongovernment employees and may add as much as $6.6 billion to funds managed by the California Public Employees’ Retirement System, the biggest U.S. pension. Calpers, as the fund is known, has assets of $242 billion.
The law is aimed at businesses with five or more employees that don’t offer pensions or 401(k) savings programs. The law requires companies to contribute 3 percent of a worker’s salary to a retirement account. Workers will be enrolled in the program unless they choose to opt out.
This is just insane, and I don't remember any public debate on it. Given that the government already has a forced retirement program with a much higher percentage contribution (Social Security with 16% of wages when including the employer piece), my guess is that this is meant as a bone for or a bailout of Calpers. Calpers wields enormous political power in the state, and it is entirely believable that they alone are behind this. Calpers is about to be forced to acknowledge that it is billions short of what it needs to cover future pension obligations because it has been assuming unrealistically high returns form its investments. Without those high returns, more money needs to be put in the fund to cover public employee pensions that march to ridiculous levels.
I have skimmed the law, and there is nothing in there about what returns will be paid to these new private employees. My guess is that private contributions will be used as a slush fund to make sure public employees get paid, because they DO have defined benefits, as well as a justification to pay Calpers managers more money. I can absolutely guarantee that when push comes to shove and Calpers is short of money, private employees will see their benefits rolled back and their contributions going to public employees' pockets.
This is also insane for two other reasons:
- In California, there has probably been a zillion lawsuits with the state punishing private entities for running "opt-out" rather than "opt-in" systems. Having to explicitly opt out to keep ones money is a scam only the government is allowed to get away with
- In our company, all but a few of our workers are already retired, working part-time for us to keep busy. The vast majority of our employees, for example, are on Social Security and many also have private pensions. So why am I forced to set up all the expensive infrastructure to provide 401K contributions to people who are all drawing down their 401k's?
NL7:
Yet again, legislators and bureaucrats attempting to slowly undo the entire concept of cash compensation. You pay people with a medium of exchange that lets them decide how to spend it. You don't pay workers in loaves of bread, tanks of gas, or DVDs. Forcing people to get paid in investment products is silly. Might as well require that every company over 5 employees give bonus compensation of raisin cookies, vacuum cleaners and The Expendables 2 on blu-ray.
September 29, 2012, 9:54 ammesaeconoguy:
Christ, this is dumb.
Not only that, but a Stanford study recently put CalPERS’
shortfall at $500 billion
http://blogs.sacbee.com/the_state_worker/2011/12/new-stanford-study-pegs-pension-shortfall-at.html
Let’s make the problem worse, since the rest of the country
will pay for it.
Again, if and when this happens, I will sue CA and all
September 29, 2012, 10:06 amelected officials of that state, and Obama, if he miraculously wins (he will be
the one to attempt this).
mesaeconoguy:
“If you assume an investment rate of
return of 6.2 percent for CalPERS, CalSTRS, and UCRP”
LMFAO, if this is their
underlying assumption, they’re about 300 basis points off, and it ain’t going
to improve – it will likely get worse - under 4 more years of President Choom
Gang.
This country is fucked.
September 29, 2012, 10:11 ammark2:
It is looking more and more like Obama will win. The Washington GOP thinks running milksaps rather than someone with convictions is the way to win an election and woo independents - but what people really want is someone with conviction focus and determination.
Obama - is much more determined and has much more conviction than Romney will ever have, and it just looks bad. Typical voter: Hmm, Obama wasn't great, but at least he convictions - maybe I should vote for Romney, and get a sheet blowing in the wind. Nah, I guess I will stick with Obama, at least I know his evil.
Even with the polls exaggerating Obama's lead, I really don't think Romney has got it.
September 29, 2012, 3:22 pmobloodyhell:
}}}} is a scam only the government is allowed to get away with
Excluding certain obvious powers (paramilitary, judicial, etc.) that are blatantly within the proper sphere of government monopoly privilege, I believe virtually EVERY action of government should be limited by the same laws they place on others. All this crap is just ephtarded.
Anyone here live in an area where they have limited, or tried to limit, the size and other features of ... "ewwww"... billboards? Do they then allow their regional transhit** system to put billboard sized advertisements on the sides of buses, which are all of 3 feet away from your face...?
===========
*** Uh-huh. I spelled it correctly, with the "h"...
September 29, 2012, 5:54 pmobloodyhell:
Evidence is strongly that the actual results are +1 Romney, not +whatever-we-Dems-invent for Obama.
The Truth About Polling: Yes, Romney Is Probably Tied or Winning
Anyone yet figured this as a setup for the notion that the GOP "stole" another election when Romney beats Obama? Essentially an excuse for all the liberal OWS sheep to start riots and generally act out their little paranoid fantasies?
September 29, 2012, 5:58 pmobloodyhell:
}}}} So why am I forced to set up all the expensive infrastructure to provide 401K contributions to people who are all drawing down their 401k's?
Well, Warren, one thing we DO know is that it CAN'T be that The One is anti-business, anti-entrepreneur.... I mean, he's having a PARTY to celebrate entrepreneurialism in America, you know? I mean, A PARTY!!! A real, live PARTY! He's having one. With entrepreneurs. And celebrities. And party hats. A PARTY!!! How many times did BUSH have a PARTY to celebrate Entrepreneurs. NONE? What kind of support is THAT for small businesses and entrepreneurs... when you won't even have A PARTY??
:-9
September 29, 2012, 6:20 pmNot Sure:
"Having to explicitly opt out to keep ones money is a scam only the government is allowed to get away with."
September 29, 2012, 7:09 pmIt's good to be the king.
Sean:
You make a good point but it's amazing how much of each person's earnings is deducted before the money gets in a paycheck. For the median household income, a third goes to healthcare, nearly 15% is payroll taxes, several hundred dollars go to unemployment insurance, another chunk goes to worker's comp, and the list of headcount fees and taxes for local, state and federal entities goes on and on. Half the earnings of low to moderate wage workers are gone before the check is cut. They may not pay much in the way of federal income taxes but this group does pay a tremendous amount and now the stae of CA wants another 3%.
September 30, 2012, 2:32 amA side note, the median household income fell by ~$4K in the last 4 years while the average household's healthcare tab went up by a similar amount. Is this coincidence?
Jim Lippard:
Your evidence appears to be Dean Chambers' pseudoscientific methodology. You should pay more attention to Nate Silver, who actually knows what he is doing. As it happens, he just commented on Chambers' nonsense yesterday: http://fivethirtyeight.blogs.nytimes.com/2012/09/29/poll-averages-have-no-history-of-consistent-partisan-bias/
September 30, 2012, 7:24 amfredrick.:
Most of the Polls are using the 2008 numbers which exagerate the Dem turnout. Fine, if that is what your company has done, stick with it. but then we have companies like Pew, which are using 2008 as a base, and adding 3 more points in favor of the Dems. Do they really expect higher Dem turnout than in 2008? Especially when it didn't appear in 2010.
The article you mentioned, is well, to put it politely, not well written, and does not come close to proving your assertion.
October 1, 2012, 7:29 amfredrick.:
@obloodyhell Even with the Poll bias against Romney - I don't think he is winning. The guy is as inspiring as McCain - just not as zany. Is that a winning strategy?
I hope I am wrong.
October 1, 2012, 7:30 amfredrick.:
I don't know - folks are shortsighted enough, where I can see some small compelled "insurance" retirement savings. That is what we have in SSA. Not sure why CA needs folks to add extra.
I Think I prefer the system they have in Chile or Australia though, where you are compelled to save a certain percentage, buy you are allowed to invest it in mutual funds of your choice, and the money is always in your control. That way if the government goes under you will still have some retirement.
October 1, 2012, 7:33 amJim Lippard:
People like Chambers are claiming that pollsters are oversampling Democrats because their percentage numbers vs. Republicans appear similar to 2008, but you're the only person I've seen claim that pollsters are using 2008 data as a baseline for adjusting current poll results. And there's another explanation for the former, as Nate Cohn points out at The New Republic: http://www.tnr.com/blog/electionate/107813/no-the-polls-arent-oversampling-democrats
October 1, 2012, 9:46 amNL7:
Don't really need to compel it. Most employers offer programs and also so do insurers (annuities) and financial planners.
If the government forces you to save then the money isn't in your control.
October 1, 2012, 10:18 amrxc:
Wasn't there a proposal floated recently to have the US govt take over all of the IRAs and other private pensions, to "save" them from not being able to pay out what people needed in retirement? Maybe California could lead the way, by "nationalizing" all pensions in the state. It would be an interesting experiment.....
October 2, 2012, 5:55 amJohn David Galt:
Why don't they start closer to home, by having CalPERS take over legislators' own pension plan?
October 2, 2012, 6:39 pmJim Lippard:
Well, looks like the election showed the validity of Silver's analysis, and the invalidity of Chambers'. (Chambers, to his credit, acknowledged as much.)
December 1, 2012, 7:30 pm