#10, December 2014
Professional Engineers in California Government
PENSIONS UNDER
For the past several years, public employee
pensions have been a punching bag,
in California and nationally, for those
who claim they caused Budget
deficits and the economic recession.
Fortunately, the pension system
has deflected or absorbed most
of the blows but the attacks
continue.
In 1999, after years of no salary increases during Governor
Wilson’s regime, legislators were politically reluctant to
approve substantial state employee pay raises to catch up,
even though the economy was booming. As a result, state
employees agreed to improvements in the retirement system
in exchange for lesser raises.
Several years later the economy went through a recession.
CalPERS and other pension systems lost money on their
investments; pensions were blamed for the economic woes
in California and elsewhere.
Proposed initiatives to gut pension benefits continually
failed to make the ballot, but so-called pension reform
legislation was enacted in 2012. Initial proposals were
destructive and unconstitutional, but ultimately the new law
had little impact on current employees, other than increasing
the employee contribution, offset by an equivalent salary
increase. However, the pension formula and resulting
benefits were reduced for future hires.
PECG HEADQUARTERS
(916) 446-0400
455 Capitol Mall, Suite 501
Sacramento, CA 95814
Email: [email protected]
PECG SAN FRANCISCO
(415) 861-5720
1 Sutter Street, Suite 800
San Francisco, CA 94104
PECG LOS ANGELES
(818) 500-9941
215 N. Marengo Avenue, Ste 185
Pasadena, CA 91101
PECG INSURANCE INFO
(415) 956-1344
The courts have long upheld the constitutional obligation
of public agencies to pay retirement benefits promised to
public employees when they were hired. This has been one
of the excuses for paying public employees less than their
private sector counterparts -- they may not make enough
salary to save money but their defined benefit pension plan
is guaranteed to them when they retire.
This principle has come into question recently as three
California cities -- Vallejo, San Bernardino, and Stockton -declared bankruptcy. While there were many factors causing
their financial problems, pensions became an issue -- was
a bankrupt city obligated to honor its pension promises to
current employees as well as current and future retirees?
The City of Vallejo agreed to continue its payments to CalPERS.
The City of San Bernardino reached a confidential
agreement with CalPERS. It was recently revealed
that it would continue to honor its pension
obligations.
The City of Stockton developed a
bankruptcy recovery plan which would
include continuing its full payments
to CalPERS. However, an investment
firm which would receive only partial
payment as the result of the bankruptcy
asked the federal bankruptcy judge to
disapprove the City’s plan to honor its
pension obligations.
continued on page 2»
FAX
Headquarters
(916) 446-0489
Los Angeles
(818) 247-2348
San Francisco
(415) 861-5360
PECG TOLL FREE NUMBERS
Sacramento
(800) 338-1480
Los Angeles
(888) 980-7324
San Francisco
(800) 924-5575
VISIT PECG ON THE WEB
www.pecg.org
Retro Pay is on the Way
All Unit 9 employees will receive two days of back pay as the result of PECG’s lawsuit
challenging the furloughs. PECG argued, and the Superior and Appellate Courts
agreed, that the furloughs in 2011 exceeded legislative authority. Thus, the state
owes the employees back pay.
The payment will be based on each Unit 9 employee’s salary in March 2011 plus
2.2% interest from that date. It is anticipated that the checks will be issued by the
end of January 2015.
95% of the PECG-represented supervisors and managers received a 10.1% salary increase
effective July 1, 2014. It took a couple of months for the raises to be calculated and included
in the regular September pay warrants. Affected employees also received checks for the two
months of retroactivity.
PECG continues to meet with representatives from CalHR, seeking the full 10.1% increase for
about 150 supervisors and managers who received less or no increases.
PENSIONS UNDER ATTACK
continued from page 1
The judge caused quite a stir when he concluded that CalPERS
might have to get in line with every other creditor, verbally stating
that pensions “could be adjusted”.
However, the City provided the judge with a recovery plan which
included full payment to CalPERS as the City emerges from
bankruptcy. In late October, the judge approved the plan.
Thus, for the time being, the long-standing principle that public
agencies honor their obligations to their employees and retirees
remains in place. It is expected that those who oppose the defined
benefit or other aspects of public employee pensions will continue
their attacks in the Legislature, at the ballot box, in the courts, and
in the media.
PECG is and will continue to be part of a coalition which opposes
efforts to weaken or destroy CalPERS and other public employee
retirement plans.
2
Alan Escarda was the recipient of PECG’s
2014 Member of the Year Award. In his
role as PECG Vice President Supervisory, Alan
worked tirelessly with the Administration,
CalHR, departmental management, and PECG
members throughout California to achieve the
long overdue salary adjustments for supervisors
and managers this year.
Mahin Khakizadeh received the 2014 PECG
Outreach Award for her outstanding efforts
in mentoring college engineering students,
judging science fairs, campaigning for PECGendorsed candidates, and fundraising for
several worthy causes and organizations in
her community.
The Inland Empire Section is the 2014 PECG Section of the Year. Section Officers are shown here receiving
the award from outgoing PECG President Cathrina Barros (right). The Section has a high membership
percentage, produces an excellent newsletter, conducts well-attended membership meetings, and involves
members in a variety of activities in the San Bernardino/Riverside area.
3
Professional Engineers in California Government
455 Capitol Mall, Suite 501, Sacramento, CA 95814
Return Service Requested
The 2015 PECG Wall Calendar is now available! Featuring 15 full color pictures of attractive California scenery and activities,
the spiral bound calendar includes state holidays and other significant dates throughout the year. If you would like a calendar,
simply contact your Section President or Director. You can also call or email the PECG Headquarters Office in Sacramento. Contact
information is listed at the bottom of Page 1.
Also, PECG members should have recently
received a 2015 pocket calendar and
membership card in the mail. If you did not,
please contact the PECG Headquarters Office.
LOS ANGELES
215 N. Marengo Ave.
Suite 185
Pasadena, CA 91101
(818) 500-9941
(888) 980-7324
SAN FRANCISCO
1 Sutter Street
Suite 800
San Francisco, CA 94104
(415) 861-5720
(800) 924-5575
PECG has been representing the
engineers and related classificatio
DETACH
PECG HEADQUARTERS
455 Capitol Mall
Suite 501
Sacramento, CA 95814
(916) 446-0400
(800) 338-1480
www.pecg.org
FOLD OVER
PROFESSIONAL ENGINEERS IN CALIFORNIA GOVERNMENT
In 1981, PECG fought for and wo
classes (architects, landscape
engineering geologists, etc.) in Sta
needs and interests of supervisors
In 2003, PECG negotiated a landmark Memorand
sought goal. In subsequent years, PECG-represe
salaries in line with their counterparts in Californi
While wasteful outsourcing continues to be a p
infrastructure and the development of clean ener
MEMBER IN GOOD STANDING
PECG represents members with grievances, arbit
elected by PECG’s 10,000 members establish PEC
professional negotiators, consultants, attorneys,
union. Because of this efficient operation and
organizations representing state employees.
PECG maintains offices in Sacramento, San Franc
geographical Sections. PECG offers members excl
group rates.
SECTION:
2015
PECG will continue to dedicate all of our efforts
sincerely appreciate your continuing support.
Roy Flores President
PECG has been representing the p
engineers and related classification
455 Capitol Mall
Suite 501
Sacramento, CA 95814
(916) 446-0400
(800) 338-1480
LOS ANGELES
215 N. Marengo Ave.
Suite 185
Pasadena, CA 91101
(818) 500-9941
(888) 980-7324
SAN FRANCISCO
1 Sutter Street
Suite 800
San Francisco, CA 94104
(415) 861-5720
(800) 924-5575
DETACH
PECG HEADQUARTERS
www.pecg.org
FOLD OVER
PROFESSIONAL ENGINEERS IN CALIFORNIA GOVERNMENT
MEMBER IN GOOD STANDING
In 1981, PECG fought for and wo
classes (architects, landscape
engineering geologists, etc.) in Sta
needs and interests of supervisors
In 2003, PECG negotiated a landmark Memorand
sought goal. In subsequent years, PECG-represe
salaries in line with their counterparts in Californi
While wasteful outsourcing continues to be a pr
infrastructure and the development of clean ener
PECG represents members with grievances, arbitr
elected by PECG’s 10,000 members establish PEC
professional negotiators, consultants, attorneys,
union. Because of this efficient operation and
organizations representing state employees.
PECG maintains offices in Sacramento, San Franc
geographical Sections. PECG offers members excl