Pension Reform as Pacifiers: The Helix Water Board Let Us Down

To the editor:

The “pension reform” in the just approved Helix Water District labor agreements is about what I feared from negotiations that have employees sitting on both sides of the bargaining table.

Despite assurances that pensions would be reformed, made during the last rate increase hearings, little was actually done. The board must have thought token changes would give the impression of action and pacify the ratepayers.

There is absolutely no reason that ratepayers should continue to pay any of the employee portion of pension costs. Yet even with the “pension reforms” just implemented, ratepayers remain on the hook for hundreds of thousands of dollars of the employee portion of CalPers pension costs.

CalPers, like Social Security, started with a 50/50 cost split between employees and employers. Even with the “pension reform” included, the table below shows what “50/50” CalPers cost sharing will look like for a hypothetical HWD employee who earns exactly $100,000 annually (and plenty of them earn more than that amount):

           Estimated Annual Pension Payments to CalPers

            Year                          Employee cost                      Ratepayer cost

            2010/11                        $0                                                $19,400

            2011/12                        $2,000                                         $21,500

            2012/13                        $4,000                                         $20,800

            2013/14                        $4,000                                          $24,100

Only an HWD employee or an HWD board member could think those numbers are fair to ratepayers! The reason the ratepayer contribution is so high (aside from the fact that it includes half of the amount an employee should pay) is that ratepayers take all of the risk for inaccuracies in CalPers actuarial assumptions—and there have been plenty of them—and that the pension program is so generous!

The “pension reform” does nothing to reign in the overly generous pension promises —even for new employees. I would be willing to bet that employees would settle for less generous pensions if they were required to pay half of the costs—as was originally intended, and as the Little Hoover Commission recommends.

As it is, the employee portion of costs is fixed while ratepayers continue to bear 100 percent of the cost increases for pensions whose objectives have morphed from providing retirement security to wealth generation. HWD employees also participate in Social Security. There is a CalPers pension plan designed to complement Social Security—and it would cost employees and ratepayers considerably less. HWD workers should be on that plan!

The “pension reform” approved last Wednesday by the HWD Board is what can be expected when our elected representatives lose sight of the fact that every dollar they so generously give to employees must first be taken from the wallet of a ratepayer.

It is what can be expected when an employee is appointed to negotiate on behalf of ratepayers. The failure to include a ratepayer advocate in pension negotiations is a breach of board responsibility to represent the public.

With the exception of Kathleen Hedberg, the only member to vote against this token reform, HWD needs a new Board of Directors—one that will truly represent ratepayers. I hope that all of us can remember that at the next elections.

Russell Buckley, La Mesa