Posted by jm, a resident of the Evergreen Park neighborhood, on Jan 21, 2013 at 1:50 pm
Is there a mandate that the City has to pay actual pensions. I don't think Stanford does this. I live on an annuity through TIAA-CREF (I think they now use Fidelity) which offered various funds that you could pay into through salary deductions before taxes like an IRA, which the university matched up to a certain annual limit. And after 30 years converted to an annuity. When I hear of the pension amounts paid out to individuals, especially those who can pad their pension in their final year of employment, I am quite shocked. And then they come back as "consultants." Can they still do this? Perhaps the large pensions quoted are for the managers. I would like to know the pension amount of a typical retired clerical worker last year.
Posted by Wayne Martin, a resident of the Fairmeadow neighborhood, on Jan 21, 2013 at 2:04 pm
> Is there a mandate that the City has to pay actual pensions
The City itself doesn’t pay pensions. It has “outsourced” that responsibility to CalPERS. The City is responsible for the difference between what the employee has been promised, and CalPERS ability to pay. Keep in mind that CalPERS not only takes care of all the administrative work necessary to compute/pay pensions, but it also has the first line responsibility to raise the money via its “money managers” to create the money to pay these promised pensions.
The City does not have any obligation to hire employees in order to discharge its obligations (typically service deliveries) to the residents/business owners. Once it hires employees, they have the right to unionize, and negotiate whatever financial arrangements that they can with their employer—in this case the Municipal Corporation that is Palo Alto.
Labor unions have been effective in getting the legislature to outlaw some outsourcing, but by-and-large, the City is free to put any of its operations out to bid in the private sector.
Posted by Whole facts please, a resident of another community, on Jan 22, 2013 at 10:45 am
If a half truth is a lie than this article is full of lies. The City keeps stating CALPERS statistics from 2003. This was a time when CALPERS nearly fully funded and were about to loose their tax exempt status. In order to prevent this they had Cities halt their contributions and developed higher payout pensions. So the year the City keeps using as a baseline is far from a realistic amount. Of course it's so low, they were on what's called a "PERS holiday."
Posted by lazlo, a resident of the Old Palo Alto neighborhood, on Jan 22, 2013 at 3:41 pm
Yikes! The City of Palo Alto failed to fund the pension/medical fund costs to account for the projected increase of baby boomer retirees and inflation! While they promised employees increased pension benefits, they stashed money intended for payment of those benefits into recorded and unrecorded reserve funds instead of funding projected pension/medical costs. Thanks to public ignorance, they are now trying to weazel out of their contractural agreements and placing blame on everyone except themselves. Dysfuntional City of Palo Alto politicians and senior management have now created an alliance to spread misinformation regarding the budget and reserve fund imbalance. Ever ask a City politician or senior manager what the total amount of funds in the dozens and dozens of reserve funds are? Prepare for a long silence and then macro-babble redirecting their ignorance on the subject.
To the poster who claims that privatizing city services and outsourcing is the answer, current companies providing outsourced employees working for the City of Palo Alto now demand and get an average three times the working wage of City FTA's (full time employees) to cover their employees health and benefit committments. Perhaps in the bizarro world of those demanding privatization and outsourcing of public service work, paying more for the same service makes perfect sense. What a pity!
Posted by Wayne Martin, a resident of the Fairmeadow neighborhood, on Jan 22, 2013 at 3:54 pm
> current companies providing outsourced employees working for the
> City of Palo Alto now demand and get an average three times the
> working wage of City FTA's (full time employees) to cover their
> employees health and benefit committments.
Ahhh .. care to cite your sources? The City has published costs for non-management workers at/about $107,000 per year (full cost) in the recent past. Three times that much would push the per-outsourced- worker costs to over $300,000. Can you identify the companies that have demanded, and are now being paid, $300K per worker?