Retirement Security

1. Retirement Security Fact, Fiction and Talking Points

2. Lavish Pensions for State Employees? • How big is a BIG pension? • Is $28,000 a big pension? • $21,000? • The $100,000 Club • City of Bell - $800,000 • How did this happen?

3. What we’re up against • The economy • The “Right” • Conservative media • Wall Street and Corporate greed

4. Pension Crisis is an Economic Crisis • Pension crisis is really an economic crisis • Pensions took a huge hit in the market crash • Unlike banks and mortgage brokers, public pension funds didn’t go bankrupt and didn’t need bailouts • In fact, pension funds have already regained significant ground; CalPERS is already back above $200 billion • Solutions should work towards ensuring the our economy recovers in a responsible way

5. Public Employee Benefits Are Not Excessive • State of CA pays less as a percentage of payroll today than it did in the early 1980s • According to PERS, average annual pension is $25,000 a year for more than 20 years of public service! • Avg. annual pension of 95,000 state workers (represented by SEIU Local 1000)- $28,755 • Avg. annual pension for all state workers- $31,186 • Recent study: state employees earn 11% less than their counterparts in the private sector

6. Public Employee Benefits Are Not Bankrupting California • 75% out of every pension dollar comes from investment dollars; remainder is employee/employer contributions • Pensions costs for the State of California are less than 5% of the State’s $86.1 billion general fund budget • Pension funds were almost fully funded until the market crashed • All retirement and 401K plans have felt huge losses • Wall Street crash cost CalPERS $69 billion in losses last year alone • This is all about the market; a 5% increase in PERS contributions won’t help this!

7. CA Economy Benefits From Pension Fund Investment • Pensions contribute $35 billion in CA’s economy • $7 of economic payback for every $1 of investment • CA retirees contribute $2 into the economy for every $1 paid in benefits • CalPERS invests $17-18 billion directly into CA economy • Supports more than 200,000 private sector jobs • Brings in more than $6 billion in local and state tax revenue

8. Countering the RhetoricMessage Recommendations > DO put public employee pensions in a broader economic context. > DO make clear to voters how little most public employees receive. > DO stress that cutting workers’ pensions will do nothing to balance the budget.

9. Countering the RhetoricMessage Recommendations > DO emphasize that pensions are primarily funded by employee contributions and investment returns. > DO be prepared to talk about pension reforms public employees have supported or will support – particularly in the area of spiking and six-figure pensions.

10. Countering the Rhetoric • DO NOT focus on the structural details of retirement benefits. At best voters find them confusing, and at worst voters are willing to support what may sound like minor changes to pension formulas. • DO NOTallow retirement benefits to be framed as a tradeoff with either increased taxes or cuts to vital services; emphasize that with proper management we can fund secure retirement for employees and provide the services Californians need. • DO NOT rely on recruitment and retention messages. While some voters find them persuasive, changes in the economy and attitudes toward pensions over the past two years have made this theme less impactful.