From the Depressing to the Surreal: Another Day in Pension Reform

Is California ready to accept meaningful public pension reform? Judging by two pieces we read today, maybe not.

The first of these comes from Ed Mendel's Calpensions.com blog, and weighs the merits of San Diego's switch to defined-contribution pensions. And by "weighs", we mean "dismisses". After letting us know that no one else in the state is proposing or recommending 401(k)-only public pensions, we're treated to this careful explanation of the risks:

Critics of a stand-alone 401(k) plan say employees tend to make poor investment choices and have plans that charge high management fees. The critics say the 401(k) was originally intended to be a supplement to a pension, not a replacement.

When there is an economic downturn or stock market crash, the 401(k) plan investments of employees nearing retirement have little time to recover. A study earlier this year found that household heads age 60 to 62 with 401(k)s have less than a quarter of what is needed in retirement.

Good work, Ed. We can't let people make their own decisions about their retirement savings because they're too dumb to do it right. Best leave it to the experts. And what's the worst thing that could come from continuing to guarantee benefits? We mean, other than the state being bankrupted by the costs of borrowing to fund benefits during a recession, and the workers losing their pensions outright as part of the bankruptcy process, what's the worst that could happen?

That piece was followed by this strange bit of conspiracy-mongering from California Watch. Apparently, an unidentified out-of-state foundation is bankrolling the efforts of Californians for Fiscal Responsibility, which has been very active in pushing pension reform here. We know what you're thinking (KOCHTOPUS!!!), but that's the problem: no one really knows for sure who's behind this "foundation". But rather than engage in any kind of, you know, journalism, and try to find out more, Chase Davis merely tells us that some sort of pro-reform conspiracy is afoot. We give this effort a big thumbs-down, Chase; you need to watch some Glenn Beck. If you want to get people behind a conspiracy theory, it can't be this vague. We need a storyline. Like this: George Soros is funding CFP to provoke Code Pink and the AFL-CIO into starting a class war, which will lead Obama to get into a new Middle East war that destabilizes the region, making it easier for the Carlyle Group and the Illuminati to sneak into Tunisia and steal the Ark of the Covenant. Okay, that's not very good. But you get the idea.