Senator Responds to RELAC's Support for Social Security Fairness Act By Ida Leon Ramos, RELAC Vice President In a letter to the RELAC President dated September 1, 2009, Senator Diane Feinstein acknowledged our recent communication with her office in support of the Social Security Fairness Act (SB 484). Recognizing the importance of this legislation to many retired county employees, she expressed appreciation for our assistance and advocacy for this bill. She went on to advise that, currently, the Social Security Fairness Act has 28 co-sponsors, and the companion bill in the House of Representatives, introduced by Howard Berman has 303! This bill has been referred to the Senate Committee on Finance and the Senator hopes the Committee will move quickly to report the bill to the full Senate for a vote. RELAC will continue to provide you with updates. But in the meantime, we again encourage you to contact your Senate and Congressional representatives in support of this bill which, if passed, would reverse a gross inequity to recipients of public pensions. With the 2009-20110 session of Congress fast approaching its conclusion, it appears that there is little chance of action on either S 484 or HR 235 in this session. In the face of the fire storm of attack on public sector pensions, few policicians, even when sympathetic to thos whose retirement income has been unfairly reduced, will be willing to vote to increase retirement incomes. You can be sure that RELAC will continue to press for fairness when the next session convenes in 2011. Public Sector Pensions Under Fire: Are Retiree Benefits Threatened? By Martin Golds, Chair Retiree Information Committee As Dave Muir informs us in his article below, the media have been running frequent attacks on public sector retirement benefits. As should be expected these attacks are associated with, perhaps inspiring of, efforts to reduce these benefits. Following are some notable examples. McCauley Pension Tax Initiative Threatens Us All Starting in early June petitions are being circulated to put the initiative sponsored by Paul McCauley on the California ballot in November. It is called the McCauley Pension Recovery Act and it is dangerous. If it is passed and becomes law it would impose a very substantial income tax surcharge on all pension taxable income of $40,000 and over on all retired California residents. The initiative defines taxable pension income as all such income including both employer and employee contributions and employer-paid health insurance premiums. Here is the schedule of surcharges on taxable pension income:
Don’t forget that the surcharge is in addition to the regular state taxes we pay on pension income. Those who receive pensions from California employers but live out of state would not pay the surtax but would be charged a one-time excise tax of 50% of the amount of their pensions over $40,000 per year for their predicted life expectancies. Taxpayers who are 75 or older on the date of enactment would get a reduction of $250,000 on the total excise tax. It appears that McCauley figured out that the courts will not allow reductions in existing pensions and in the pensions promised to active employees; that only newly hired employees can receive reduced retirement benefits. So he concocted the surtax ploy as way of reducing these benefits. It hardly need be said: Don’t sign the McCauley Pension Recovery Act petition! But also don’t be too alarmed. The odds are good that this awful thing can be defeated. In the past McCauley has sponsored initiatives which have not made it to the ballot, probably because he did not have the money required to collect enough signatures. In addition he has made his task more difficult by taxing private sector as well as public sector pensions; that will get him more opposition, not only from private sector retirees, but very likely from their employers who would not like to see the benefits they are paying their retired employees so radically diminished. And there are many voters who will oppose any new tax no matter who is required to pay it. Bulletin: Pension Tax Initiative The McCauley intitative to impose heavy taxes on pension income will not appear on the California ballot this November. We have learned that an insufficient number of voteers signed petitions. However if the required number of signatures is obtained by November 8, 2010, the intiative would be on the next statewide ballot. This would very likely be in the primary elections of 2012 unless a special election is called for an earlier date. This initiative is bad news whenever it passes. So ask all of the California voters you know to refrain from signing the McCauley Pension Tax petition at any time. Fighting Back Against Media Attacks on Public Employee Pension Benefits By: David Muir, RELAC Member, Retired LACERA Legal Counsel It’s hard not to notice the almost daily attacks in the media that characterize public pension benefits as “generous” or “lavish.” The media seems uninterested in reporting on the issue in a fair and balanced way. So we must mount a grass roots effort to educate the public about the many benefits associated with public pension plans. The most recent RELAC newsletter included my article reporting on a recent study finding that public pension plans are vital in boosting California’s economy, especially during the Great Recession when pensioners relying on tanking 401(k) plans are spending little. Next time you hear someone bad mouthing public pension plans, fight back with some of the facts included in the study, which are summarized in my article. And characterizations of pension benefits as “generous” or “lavish” should be challenged. The National Institute on Retirement Security (NIRS) recently blasted the Washington Post for its January 2 editorial that described benefits averaging $1,470 as “generous” or “lavish.” NIRS pointed out that many public pensioners are ineligible for social security benefits. In those cases, a so-called “generous” or “lavish” $1,470 retirement allowance may be the sole source of income in old age. To read NIRS’ letter to the Washington Post, go to www.nirsonline.org and click on the “MEDIA” tab, then “Letters to the Editor.” As reported by Diane Sandoval in the last newsletter, the average LACERA retirement allowance is approximately $3,275 per month. It’s hard surviving on such a meager amount anywhere, and especially in Southern California. While some LACERA retirees receive social security benefits, under current law for many their LACERA retirement benefits and/or their social security benefits are reduced. The purpose of this page is to urge that members take specific action on matters which affect the well being of all RELAC members. Members who wish to express a different point of view or who recognize a need for action by our membership are invited to send their comments to takeaction@relac.org |