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STATE PENSIONS UNDER ATTACK

The Voter Empowerment Act of 2016 2016 Classified Educational Leaders Institute

February 26, 2016 | presented by: Sal Villasenor

Public Pensions & Politics

• CalPERS largest pension systems in U.S.A• Every dollar paid to a CalPERS retiree comes from:

.65 Investments | .22 Employer | .13 Members• Thirteen (13) Board of Directors appointed & elected

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Public Pensions & Politics

• Total active membership over one (1) million• Total school employee membership over 600,000• Total school retired membership over 300,000• Rates:

Employer 11.87% | Employee 7% | PEPRA 6%

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Politics Drive the Discussion

• Defined Benefit Plan (DBP) vs. Defined Contribution Plan (DCP) / 401(k)

• DBP secure benefits • Longevity major factor • Health care costs rising

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Politics Drive the Discussion

• CalPERS fund shortfall just over 11 billion • A key aspect of sustainability is fund status

– The ratio of the assets to accrued liabilities • The state’s economy and when we hit that recession• Fiscal impact of that recession on funds investments

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The Initiatives Awaiting a Chance

• The Voter Empowerment ACT (VEA) of 2016 – Local voters have the final say on what type of retirement

plan can be offered to new public school employees hired after January 1, 2019.

• The Government Pension Cap Act of 2016– Local voter language same as The VEA of 2016 – 11% cap on non-safety employees and 13% on safety

employees– Chuck Reed, former Mayor of San Jose, and Carl DeMaio,

former San Diego City Council Member

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The Current Voter Climate

• Over 50 initiatives able for circulation• June 2016 Primary smaller voter turnout• November 2016 General Election larger turnout• Elections in 2018 pose new opportunity• 2018 election has state only focus not national• 2018 election allows for supreme court cases• 2018 election allows more opportunity for new funds• Polling will be higher in the 2018 election verse 2016

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Questions and Answers

If you have questions or would like additional information, please contact ACSA Governmental Relations Department.

Sal Villasenor: svillasenor@acsa.org

Lisa Morris: lmorris@acsa.org

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