On Monday, we wrote an editorial criticizing state Treasurer Bill Lockyer for his theatrics in resigning from the advisory board of a Stanford research group that has raised alarms about the state’s pension crisis. The team, headed by former North Bay legislator Joe Nation, has crunched the numbers and contends, among other things, that putting off pension reform is costing the state $3.4 million a day.
Today, we received Lockyer’s response to the editorial. I’ve posted it below. Given that he doesn’t address what he found wrong with Nation’s “snake oil,” we’ve invited him to write a longer piece that we could run as a Close to Home explaining why he resigned from the board. If he declines, we will just run this as a letter to the editor on Wednesday.
- Paul Gullixson
“Regarding ‘A head-in-sand approach to pension issue.’ The Press Democrat makes a fatal leap of logic: I don’t buy Joe Nation’s snake oil; therefore, I’ve got my head in the sand on pension reform. Wrong.
I have long said public pensions are too expensive and politically unsustainable. I’ve talked about specific reform ideas.
Mandate for new employees a hybrid plan under which a defined benefit component, including Social Security, would guarantee 75 percent replacement income for employees who work at least 40 years. Supplement defined benefits with a 401k-style defined contribution component. Increase the number of years folks have to work to collect full benefits. Heighten the age at which employees can start collecting benefits.
To speed the process of cutting unfunded liabilities, many current employees would have to switch to the new plan. They can’t be forced. But we can find ways to encourage current employees to move voluntarily to a plan that saves taxpayers’ money, and theirs. For example, we could reduce how much employees contribute to the new, lower-cost plan. They would trade increased take-home pay (not a pay raise) for less generous retirement benefits. This approach might be particularly attractive to younger workers.”
California State Treasurer