April 6, 2017

Editorial Maintains 2012 Pension Reforms Are Working

BY: Nate Kowalski, Jorge Luna, Joshua Morrison

Last month, the Bay Area’s Mercury News published an editorial by Dave Low headlined “Opinion: CalPERS Pensions Are Just Fine, Thank You Very Much.” Low heads Californians for Retirement Security, an organization claiming a membership of more than 1.6 million public employees and retirees. Low’s editorial maintained that the pension reforms enacted in 2012 have bolstered the long-term health of California’s public pension systems just as they were designed to do. Low wrote, “Since Brown’s reforms upped the amount workers must contribute from their paychecks to fund their retirement, the state has realized cost savings of up to 5.1 percent of payroll for public safety employees, and 1.2 percent of payroll for other workers hired after January 1, 2013.” He stated, “Experts projected that the 2012 pension reforms would reduce collective retirement benefits to public workers by about $85 billion over time, and a recent CalPERS analysis showed that these savings are accumulated even faster than originally projected.”

Low admitted that since the reforms were enacted, the pension plans’ funded ratio (total assets divided by total liabilities) has declined and employers’ contribution rates have increased. But he asserted this is not the fault of the reforms, but rather due to factors such as longer lifespans, salary increases in a recovering economy, and lower earnings in the stock market. He stated that without the pension reforms, contribution rates would have been higher. Low concluded: “The 2012 reforms were enacted to enhance sustainability of the funds over time. They have begun to work and will continue to work for decades to come.”


Undoubtedly, recent reforms have reduced the long-term cost of California public pensions. While it is debatable whether the reforms and ensuing cost reductions have gone far enough, Low’s argument that the stock market is partly to blame for recent pension problems holds no water. When California pension reforms went into effect on January 1, 2013, the Dow Jones Industrial Average was approximately 13,000. Since then, it has increased by more than 50 percent, to over 20,000.

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CATEGORIES: pension reform


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Attorney Bio(s)


Nate Kowalski




Nate Kowalski is a Partner in the Cerritos office and Chair of the firm’s Public Entity Labor and Employment Practice Group. He is an accomplished litigator who represents employers in both the private and public sectors. Mr. Kowalski has litigated hundreds of sensitive and complex labor and employment cases in state and federal courts and has achieved remarkable results for his clients in hearings, arbitrations, trials and appeals.

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Jorge Luna




Jorge Luna is a partner in the Cerritos office of Atkinson, Andelson, Loya, Ruud & Romo. Mr. Luna has been practicing law since 1996 in a variety of areas, including employment, construction, business litigation, intellectual property and entertainment. For the past 12 years, Mr. Luna has focused his practice exclusively on employment matters, with an emphasis on litigation.

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Joshua Morrison

Joshua Morrison

Senior Counsel

(562) 653-3200


Joshua Morrison is a senior counsel in the Cerritos office of Atkinson, Andelson, Loya, Ruud & Romo. Mr. Morrison represents California public school districts in all aspects of general education law. His areas of specialty practice include public employee discipline/dismissal, administrative hearings, matters before the Public Employment Relations Board, petitions for writ of mandate, retirement health benefits, PERS/STRS, and school district audit appeals.

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