MOORLACH UPDATE — Voice of OC — March 16, 2011

It’s always interesting when a reporter tries to psychoanalyze someone he’s writing about.  It’s a tricky game to play, especially when his facts are wrong or not stated in full (incomplete).

Let me help out Norberto Santana of the Voice of OC.

In 2004 I was vocally opposed to the new “2.7% @ 55” for general members.  Norberto knows this to be the case, he was there at the time.  After the vote I also asked to be exempted, like AFSCME, one of the bargaining units which did not request the new and more generous retirement tier.  That was turned down.

Yesterday, the Board discussed pensions for new Supervisors.  I made an inquiry regarding current Supervisors.

I have never stated that public employees should have “no pension at all.”  This is false.  I believe a workman is worthy of his wage.  Instead, I have advocated for defined contribution (DC) plans for public employees statewide.  A DC plan is still a pension.  More on this in a future Update.

The recently released Little Hoover Commission report on public employee pensions is spot on.  I also believe that all public employees should roll back their pensions.  I should do it.  The managers should do it.  The deputy sheriffs should do it.  And the general membership should do it.

Let’s say you’re playing with three blocks.  Today you have a fully funded pension plan—that’s two blocks.  Tomorrow you receive a 50 percent increase in retirement benefits—that’s three blocks.  You only have two blocks of funding; therefore your pension plan is only two-thirds funded.  Where is the County’s pension plan in this scenario?  It is two-thirds funded.  It’s been doing fine in generating investment returns.  It just can’t make up the one-third difference that was thrust on it.  That’s your job, the taxpayer.  You have to pay for the third block.

I believe we need to go back to two blocks.  That’s why I broached the subject at yesterday’s Board meeting.  No hypocrisy here; I would call it consistency and Norberto knows it.  I’ll buy him some books on Freud and some truth serum for Christmas.  J

Supervisors to Consider Killing Pensions for Future Supervisors

Ever since he was elected last summer, Orange County Supervisor Shawn Nelson has been trying to get rid of pensions for local elected officials.

It hasn’t been easy.

At first, Nelson tried to get officials to adopt a simple 401K plan instead of a pension. That proposal — delayed at virtually every meeting where it’s been on the agenda — never got far even though most supervisors publicly said they supported the idea.

Things might be changing.

Nelson and Supervisor Bill Campbell said they have developed the basics of a proposal that would have future supervisors switch their pension for the U.S. government’s Social Security program.

"This is a very hot topic," Nelson said, noting concerns about public sector pensions.

Nelson noted that he got some inspiration from Assemblyman Curt Hagman who proposed taking pensions away from all elected leaders. Frustrated with how little progress he’s achieved on his 401k plan, Nelson said this option seemed workable.

"Put all future electeds on a FICA system," Nelson said.

Under state law, supervisors are allowed to opt-in or out of the county pension system. Since taking office, Nelson joined Supervisor Pat Bates as the only two supervisors who are foregoing a county pension. The others will still get a pension even if they change the rules for future boards.

The taking of pensions has been a sticky issue for top local officials, especially as anti-pension rhetoric continues to heat up in this Republican-controlled county.

It has become a particularly awkward issue for Supervisor John Moorlach, who has made a name for himself as a prominent critic of public sector pensions.

Moorlach said he wants to switch down to his former pension — as OC officials are asking federal officials to allow — but he still supports the concept of a pension for elected officials.

"I never wanted to go up to this new level," said Moorlach, referring to the enhanced pension formula known as 2.7 @55. "I’m happy to move back to the old formula. It’s time for something dramatic."

Yet many observers said Moorlach is being hypocritical because he won’t accept what he’s prescribing for many public workers: no pension at all.

Campbell asked County CEO Tom Mauk to bring back alternatives in mid-May.

— NORBERTO SANTANA, JR.

 

FIVE-YEAR LOOK BACKS

March 14

2001

The saga continued with “Edison investment may power policy changes:  Treasurer’s proposed changes would block the county from buying securities with negative rating.”  It was in the OC Register and it was by Martin Wisckol.  While some were pursuing feel good solutions, I was looking for professional adjustments.  Here are a few selected paragraphs:

                Hoping to steer clear of controversial investments such as the $40 million he put into Edison International last year, Treasurer John Moorlach is proposing tightening the county’s investment policies.

The county has received full payment as scheduled on $20 million of its investment, and has been receiving scheduled payments on the remaining Edison securities, which mature July 17.  Additionally, John Schiavetta, an analyst with the Fitch rating service, called the policies for the county’s $1.3 billion investment pool among the state’s most conservative.

Moorlach will run his proposals by the Treasurer’s Oversight Committee today before presenting them to supervisors.

“We’ve been conservative,” Moorlach said.  “Now we’re adding one more step.”

Supervisor Todd Spitzer, however, said he wants safeguards stricter than those Moorlach is proposing.

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