OC BLOG

 
 

OCEA's Misleading OC Blog Ad

Posted by: Jon Fleischman | 06/24/2008 6:11 PM

It's not the first time that I have said this on the OC Blog, but the "defined benefit" retirement systems that have become prevalent in the public sector are outrageous, and take advantage of taxpayers.  In the private sector, where employees have retirement benefits, they traditionally are a defined contribution program. 

To put this in English for the uninitiated -- defined benefit programs lay out how much a retiree will receive by way of a benefit.  (A good example would be the lavish "3% @ 50" benefit enjoyed by many in law enforcement, who get 3% of their highest salary multiplied by their years of service, when they retire at age 50 or later.)  A defined contribution program is where an employer puts a certain amount of funds into a retirement account for an employee each year.

Anyways, this blog post is to take umbrage with an ad that the Orange County Employees Association is running here on the Red County/OC Blog website.  Since it took me about 50 refreshes to get the ad to come up, I have reprinted it here on this blog post.

ocea_300x250.gif
OCEA members enjoy a defined benefit retirement package.  While not as generous as the law enforcement package, it's still pretty nice.  Their is 2.7% % 55 years of age.

Anyways, the ad as you can see brags up that OCEA members are paying for their own "enhanced pensions" -- ummm, NOT.  I think that it is important to remember that the taxpayers pay the salaries of Orange County Employee Association union members.  If a percentage of their taxpayer-funded salaries goes to cover their defined benefit, that doesn't change the fact that the taxpayers are on the hook, ultimately for funding this benefit.

It is really unfortunate that with an all-Republican Board of Supervisors, we have not already taken a hard line with the public employee unions and simply made it clear that going forward, no more defined benefit pensions are acceptable.  Our county should be taking a leading role here by moving to defined contribution retirement programs for all new county employees.

Comments

Chris Prevat said:

Thanks for the link Jon. Maybe you should read the report. Your opinion is wrong, but I certainly wouldn't expect facts to get in your way.

Paul said:

are paying for their own "enhanced pensions" -- ummm, NOT.

and your facts to back this statement up are where? link? file?

COTOBLOGZZ said:


OC Republicans, like most California Republicans and the rest of the country for that matter, are RINOs.

To clarify my point, it seems a bit semantic to say that OCEA members are paying for their retirement from their salary.

All that means is that instead of the county directly paying for their benefits, it means that the county is paying the employees some amount of money large enough for them to buy into a defined benefit program.

So, riddle me this. What happens, ultimately, if there isn't enough money put away to fund this scheme? Who then pays?

Observer said:

Did you reject your participation in the program while a county employee, Jon?

Any complaint about pay and benefits rests not with the employees who negotiated them, but with the leadership that approved them, right?

That overly generous 3 at 50 deal for the Sheriff's Department, by the way, came when Carona wanted to flush out Gates' old leadership by offering the top retirement package to get them to go.

Aaron Park said:

Hi Jon - This sort of stuff is what we do for a living in my office.

Defined benefit plans went out of favor when market returns started to become unreliable because businesses were having to dump loads of money into the plans every year in order to maintain the guarantee of a benefit.

Just like socialists try to guarantee equality of outcome - defined benefit plans try to guarantee a payout.

Conservatives guarantee equality of purpose - along those lines, 401(k) plans exploded in the 1980's where employers could match the employee's contribution and even dump in a little extra into a profit-sharing plan.

Arnold, before he went south proposed the above solution - and the Public Employee Unions went bonkers. They cited some esoteric "loophole" and Arnold withdrew that initiative from the 2005 special election.

Definded benefit plans are bad news - with the state in the hole massively, the taxpayers are getting hammered to cover the gaps in defined benefit plans for union members.

Why? In addition to having to guarantee a payout - the money managers are making politically-motivated decisions on where to invest... they did not buy Oil stocks, even those have done well the last few years, they even decided against purchasing RJR-Nabisco, because the RJR part is a (gasp) Tobacco company.

As a result - the universe of stock / investments available is also restricted - further applying pressure to the system.

Whenever reform is proposed - the taxpayers get slammed again as our tax dollars through union dues finance deceptive advertisements designed to maintain the status quo.

Rogue Elephant said:

Jon is right. Taxpayers pay for the benefits because we pay the salaries of these GERB's (Government Employed Rat B*st*rds).

It is time taxpayers held the Board's feet to the fire and forced a switch to defined contribution - like the rest of us working shlubs in private sector. The GERB unions have grown overpowerful and someone needs to stand up for taxpayers.

GOP - if you don't stand up for your principles, then how can you expect your representatives to stand up for them?

whospokeit said:

Do the Board of Supervisors receive a defined benefit retirement after 4 years of "service"?

Anonymous said:

This is great !!! The former PR/ Press flack for Mike Carona accusing OCEA of misleading people. Well I guess he is an expert at it.

Uh,.....Yeah. We do pay for our own. The County pays a LOT LESS than if they had to pay into Social Security. What???????? You didn't know we don't get social security and the county does not pay into it?

Get your facts straight. We both pay into it. The county still only pays what they would have had they been paying at the lower 1.667@62 rate. But, you and the Register and the rest of the lame republicans don't want the truth. You just want to "tell it like it is".

Paul said:

"All that means is that instead of the county directly paying for their benefits, it means that the county is paying the employees some amount of money large enough for them to buy into a defined benefit program."

1. Did County employees get a raise to provide this 'large sum of money"?

2. What do you mean by "buy into it"?

3. You do know the reason the private sector no longer has as many DB and went to DC plans? And can list it?

4. In the past 71 years can you identify any tax increase that was used to 'pay' for the DB plans?

5. Can you explain why DC plans are better that DB plans for the employer?

6. Do you know how many time employees gave up pay raises to keep their DB plan? Can you list them?

7. Most public employees are employed for over 30 years and then retire, why? why do most private companies lose employees every 5?

8. How much money has the county save over the past 71 years by not contributing to the retirement fund?

9 Do you have a clue how the retirement fund works? And if so, would you explain it in detail, so others might have the same understanding you do?

Paul said:

"So, riddle me this. What happens, ultimately, if there isn't enough money put away to fund this scheme? Who then pays?"

Can you identify one DB plan by any private or public entity that has ever failed to be funded and had to be "saved"?

And please do not list any plan that was dumped by companies because they failed to fund them as required by law, or was raided for the funds in their plans, or airlines who went bankrupt to get rid of them, or any of the other methods by which business 'relieved' themselves of their legal responsibilities just so they could make a buck for their CEO's and inflate their bottom lines.

And the one who pays for all those companies throwing their retirees under the bus is ..... YOU and every other US taxpayer. It is called the Pension Benefit Guaranty Corporation.......

The county wanting to switch to a defined contribution plan should tell you how much faith they have in their ability (or the ability of OCERS) to manage the money in the fund. Fortunately, OCERS isn't completely dominated by the county. That leaves their investment employees free to make intelligent decisions on how the pool money is invested. That is why the fund consistently outperforms expectations and will remain a viable fund, oh, probably forever. God help us if this changes and the county is somehow able to dictate investment policy. Can you say, "Chriss Street"?

8AF said:

Hey Jon,

How about you call your conservative friends in DC (no pun intended)and get them to change the DoD over to a DC plan for our military personnel. It's real generous. 50% @ 20 years regardless of age. I bet your conservative congressional representatives will lead the way. Especially Tom McClintock if he gets elected in November.

You won't respond because like other wannabe pundits your long on rhetoric and short or in most cases zero on follow-up.

Anonymous said:

It's funny how you disappeared from headquarters when the heat was on Carona and then you reappear in uniform the day the new Sheriff is sworn in. Why wasn't your pay along with the other four press release officers posted on the Register's web-site? What was your pay when you worked for the Sheriff's Department and more importantly what was your job description. You rode Carona's coat tails as long as you could. The department needs a fresh start, so why don't you turn in you badge and gun and don't let the door hit you on the way out.

COTOBLOGZZ said:



Discussion in this thread is exhibit A, in support of the argument that public safety will soon follow the way of the OCR ---outsource to counterbalance the accumulation of dead wood.

OC XPlant said:

Jon,

I like your commentaries. Especially when I need a good chuckle. Let's look at your intuition in other areas. On June 5, 2006 you wrote a column supporting Mike Carona for re-election to sheriff.

You wrote a couple of lines I really liked:

1. Over the years, I have come to know Carona as a man of strong integrity with a commitment to freedom and liberty, and a passion for public policy administration.

2. If you didn't know it, I work full-time in the media relations office of the Orange County Sheriff's Department. In that capacity, I get an insider perspective of Sheriff Carona.

So given the recent revelations of money laundering, witness tampering, secret recordings, and infidelity just how much of an insider are you really?

And we know you're busy with a new baby and all, but since I read the FlashReport infrequently I just want to let you know you've been missing out on one of the biggest political stories to hit CA. Carona was indicted by the Feds, he resigned, and is currently awaiting trial. I just wanted to let you know since I haven't seen anything about this story on the FlashReport which claims in its tagline to be ...California's most significant political news...

Anyway enough about the thoroughness of your assertions. There have been many reasons why the private sector has rid itself of DB plans for lower echelon employees. Many of them have been stated here but the most important one is during the 80's when the anthropomorphic Gordon Gecko's and other corporate raiders were playing real life Monopoly and Pac Man the first thing most of them did was raid the pension funds and then split. Previously solvent funds were left barely intact or turned over to the PBGC. In essence throwing the lower echelon to the winds to fend for themselves.

This article from the WSJ points out that DB plans are very much alive and well in the private sector. It is a misconception to believe otherwise. They just aren't available to people like you.

And lastly I would also like to know when conservatives such as yourself are going to make the same case about the DB plans for our military personnel. Riddle me this? Do you know how those are paid? There is no account out there with anyone's serial number on it. When that person retires from the DoD they start collection 50% @ 20 years or 75% @ 30 years regardless of age. Deficits be damned, the pension is paid even if it is done with monies borrowed from our numerous debt holding nations. Theoretically an individual who enlisted right out of high school could start collecting AT 38 for the rest of their life. So when can we expect the same level of acrimony towards that group you reserve for those who have chosen to commit themselves to public service?

Rogue Elephant said:

"Those who have chosen to commit themselves to public service?" You mean those who couldn't hack it in the private sector and took government jobs instead.

OC FireStorm said:

Hey Rogue Elephant,

While I'm not a member of OCEA, I'd be glad to compare the duties and responsiblities of my occupation to yours anytime. Let's see if you could hack it at my job.

Jubal said:

What job would that be?

OC XPlant said:

You mean those who couldn't hack it in the private sector and took government jobs instead.

Would that include the men and women in uniform defending our nation? Those are government jobs and would be considered public service.


Leave a comment

 

Type the characters you see in the picture above.

 

SPONSORED LINKS

Community: Get Involved

Blogpen Login RSS Feeds Daily Dose
Please Enter Your E-Mail Address


Advertise Here

Comments

tylerh commented about

Irvine has a new newspaper. Let's all help!

09/05/2008 2:04 PM

Dan Chmielewski commented about

Ooooooh, barracuda?

09/05/2008 1:52 PM

Coach Ochoa commented about

Orange Street Fair: Day 1

09/05/2008 1:33 PM

Stephanie A. Richer commented about

Ooooooh, barracuda?

09/05/2008 12:12 PM

Dan Chmielewski commented about

Irvine has a new newspaper. Let's all help!

09/05/2008 12:03 PM

Ted Costa commented about

LA Times Releases Unbiased Voter Guide!

09/05/2008 11:44 AM

Daddy CakesĀ® commented about

Enjoying my Favorite Flapjacks with a Few Politicians

09/05/2008 11:21 AM

Philip Keller commented about

Laguna Niguel City Council Election: May the best person win

09/05/2008 10:34 AM

chrisdaines commented about

Penrose Ballot Issue Settled

09/05/2008 10:21 AM

David Zenger commented about

Irvine has a new newspaper. Let's all help!

09/05/2008 10:12 AM

Allan Bartlett commented about

Irvine has a new newspaper. Let's all help!

09/05/2008 9:30 AM

tylerh commented about

Irvine has a new newspaper. Let's all help!

09/05/2008 8:37 AM

Len Kranser commented about

McCain Turns In Strong Showing

09/05/2008 8:37 AM

David Zenger commented about

Irvine has a new newspaper. Let's all help!

09/05/2008 8:17 AM

judi commented about

Pro-Pringle PAC Diving Into Anaheim Council Elections

09/05/2008 12:11 AM

Categories

1st Supe District Watch (149)
1st Supervisor District (19)
1st Supervisor District Special Election (350)
2006 Races (1)
2007 Wildfires (11)
2008 Elections (136)
2010 Elections (1)
241 Tollroad (66)
33rd Senate District (11)
34th Senate District (6)
4th Supervisor District (1)
AD60 Watch (69)
AD71 Watch (103)
AD73 Watch (17)
Add category (1)
AHUSD Special Election Drive (9)
At The Trough (92)
Blogworld Expo 2007 (1)
Buena Park (1)
California Stuff (290)
Carol Rudat (6)
CD46 Watch (19)
CD47 Watch (11)
CUSD Recall (27)
Daily News Roundup - 2008 (181)
Daily News Roundup -- 2007 (309)
Debbie Cook Ballot Title Lawsuit (3)
Erwin Chemerinsky (1)
Fairness Doctrine (1)
FEATURE (36)
Fullerton (3)
Fund 130 Watch (1)
Garden Grove (2)
General OC Stuff (68)
Greeniacs (8)
Harkey Agonistes (8)
In re Rachel Home School Ruling (1)
Irvine Mayor's Race (4)
Ladera Peaker Plant (1)
Leftosphere (2)
Liberty (64)
Loretta for Governor (2)
Making of the President (51)
Making of the President 2008 (67)
Measure D (1)
Measure M Renewal (1)
Mike Carona (62)
Monsignor John Urell (13)
National Stuff (57)
Nativo Lopez (1)
Newport Beach (1)
News (31)
Nimby Mouse (45)
NIMBY Watch (1)
OC Blogosphere (60)
OC Blogpourri (7)
OC Judge Races (40)
OC Parks (2)
OC Register Website Lameness (2)
OC Sheriff's Department (47)
OC's Next Sheriff (83)
OC/DC (17)
OCTA (20)
Old School (4)
OUSD (14)
Politics Behind the Orange Curtain (519)
Property Rights (14)
Raymond Chandler Quote of the Week (28)
Red County blogs (5)
Red County magazine (3)
Red County Radio (25)
Retroactive Pension Rescission (23)
SanTana (4)
SD29 Watch (7)
SD33 Watch (97)
SD34 Watch (1)
SD35 Watch (13)
Steve Ambriz (1)
Tan Nguyen (1)
The 3rd Floor (6)
The 5th Floor (146)
The New Majority (3)
The Perils of Chriss Street (29)
The Sheriff's Race (2)
Theo Lacy (1)
TIN CUP 2 (16)
Transportation (31)
Viet Politics (41)