September 30, 2010

pension: facts

i've decided to put out some facts about California's current budget crisis in relation to pension reform as this seem to be a hot topic around the office watercooler.  GAS (Governor Arnold Schwarzenegger) is pushing for pension reform by refusing to approve the budget if pension reforms are not included.

The attack on secure retirement is, I believe, politically based and nothing to do with economics.  Some facts:  (note: I belong to CalPERS so I am only including facts that are associated with CalPERS. Some facts may also be pertinent to the other pension plans)
  1. The state contribution for about two-thirds of the workforce is the same, as a percentage of payroll, as the average during the 1980s.
  2. The average retiree receives $2,100 per month which can increase by no more than 2% per year, regardless of inflation.
  3. For every $8 received by a retiree in a pension, $6 comes from investment returns; $1 from employee contributions; $1 from the employer or taxpayer.
  4. The employee contribution varies between 5% and 8% of salary. The employer or State contribution varies from nothing to 21%, depending on investment returns. Over a 20 year period, the employee and employer contributions are about equal.
  5. Due to the downturn in the economy, the State contribution is currently 16.9%, or about $3.3 billion per year.
  6. PERS estimates that in future years, the State’s contribution could increase to 24% or $4.7 billion, before gradually reducing. The increase will be less than that if investments yield a higher return than projected, which has frequently been the case in the past.  Current project of return I believe is around 7.5%.
  7. GAS asked CalPERS to bill the State an additional 1.5 billion more than necessary in order to bolster his argument that pension plan is too expensive.  CalPERS rejected GAS's proposal.
when we talk about budget crisis in California, it is related to the General Fund.  CalPERS requested state contribution to increase by 600 million (3.9 billion total) this fiscal year but only 87 million of which comes from the General Fund.  The rest comes from Special Funds such as transportation.  This is also an estimate which projects salary increses.  State employees have not had raises for the past 3 years as well as on the receiving end of GAS's 15% unpaid furlough leaves so the actually amount is projected to be around 475 million.

of course, one or two rotten apples can spoil the whole and incidents like city of Bell and Vernon greatly damage the image of public employees and their pensions.

September 23, 2010

diy: privacy fence

since buying our first home last year we've sunk quite a bit of money into it so I've decided not to hire someone to build the fence for the trash area and do it diy style.  Picked up the lumber today at home depot and let the flirty cashier talk me into opening a home depot credit card.  I did however play hard to get and she ended up offering me a $50 gift so my hundred dollar worth of lumber turned into fifty... and that's how you do it boys.

I will keep you updated on how the fence turned out with couple of photos... stayed tuned.

September 22, 2010

rant: just a little...

I have no idea how my mind is able to handle four different passwords for work along with the numerous passwords for my personal email and financial accounts.   On some days I find myself trying to remember passwords that I was just using from the not so distant past. (day before)  Is it really necessary to have a login for booting up my laptop, another login for novell, another to access my work intranet, and another for work email? On top of that all with different expiration dates and different security requirements thus hindering my attempts at using the same password for all four.

and here I thought technology is suppose to make my life simpler...

frustrated: politics...

According to Meg Whitman's 48-page "policy agenda", the MEG2010: Building a New California, her proposed tax policy would be to ELIMINATE THE STATE TAX ON CAPITAL GAINS and basically shift all tax burden to the middle class and the poor. 

How would you solve the State's budget problems by cutting the 50% taxes paid by the 144,000 richest people in the state?  How is this even a responsible way to address the state's already oversized debt level?  Sounds to me that she's just looking out for good ol' number one by saving herself and others billionaires a fortune by not paying any taxes on two-thirds of their income. 

The argument that if only the "poor" super-wealthy people's back-breaking tax burdens were lifted, they would surely be spending that money into creating wonderful new jobs for everyone is ridiculous.  This trickle-down economic theory has never worked and yet still been pushed hard on us by the wealthy politicans. 

I am disgusted and disappointed at the current political climate both here in California and in Washington.  There are simply no honest discussions left.  Nothing is on the table to be discussed and worked out in the best interest of the people and America.  Everything is talking points and pointing fingers... Sigh.