For a small but probably growing number of California’s government workers, the worst-case scenario is here: The failure to adequately fund public pensions is leading to devastating reductions in their promised retirement benefits. If the pension problem were a cloud of carbon monoxide, there would be no more need to wait for a canary to keel over.
The California Public Employees’ Retirement System board could vote next week to cut the benefits of nearly 200 former employees of a Southern California job-training agency by 63 percent. It would be CalPERS’ second such decision in a few months: The board voted in November to make comparable reductions to the benefits of five former employees of the tiny Sierra Nevada city of Loyalton, the agency’s first pension cut in memory. Retirees from two other small agencies could face similarly unforgiving consequences of others’ irresponsibility.
The pending reduction, reported by Bloomberg, affects the onetime workforce of the defunct East San Gabriel Valley Human Services Consortium, also known as LA Works, an agency formed by four Los Angeles County cities in 1976. In 2014, the county, LA Works’ chief source of support, found extensive irregularities in its performance and billing and ended its contracts, effectively killing the agency.
