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Filner Pension Plan: Skip Reform, Protect the Government Employee Unions

Monday, April 30, 2012
posted by Carl DeMaio

Earlier I issued the following statement in response  to the release of Congressman Bob Filner’s proposal to borrow more money to keep unsustainable city employee pensions in place without reform:

 Paying One Credit Card With Another

Bob Filner’s plan involves debt to pay debt.  Filner’s use of Pension Obligation Bonds is not reform and simply kicks the can down the road.  Filner is merely taking a page from the failed approach of previous City Hall politicians who opted to keep unsustainable pension benefits in place for city employees while passing higher levels of debt on to our children.

In contrast, my proposed solution with Prop B reduces pension debt through actual reform of pension benefits – and by switching to 401(k) plans, taxpayers will never be on the hook for debt for retirement benefits again.

No Real Cap on Pension Benefits

Bob Filner proposes no reform to existing pension benefits for city employees – and his proposed cap will not affect any new hires for 10 to 30 years.

In contrast, my proposed solution with Prop B ends the abuse of pension spiking for existing employees immediately, freezes all existing pensionable pay calculations, and implements a real cap on taxpayer costs by switching to a 401(k) plan for new hires.

No Action – Just Another Government Study Group

Instead of committing to actual action and reform, Bob Filner proposes to create yet another study group.  10 years should have been enough time to study this issue already.

In contrast, my proposed solution with Prop B puts pension reform where it should be: in the hands of the voters.  Voters will take decisive action and do what the politicians failed to do – provide immediate pension reform, not more study groups.

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One Response to “Filner Pension Plan: Skip Reform, Protect the Government Employee Unions”

  1. Erik says:

    Even more risky is that Bob’s plan hinges on the market continuing to robustly provide 9-10% annualized returns over the course of the life of the POB. Well goodluck with that.

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