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California Vital Issues Archive

*********ACTION CALL***********

Dear Member- the following was a letter sent to Governor Jerry Brown. Please contact him and your representatives to voice your opinion on this matter

February, 2011

Dear Gov. Brown,

As you may recall, my name is Malcolm Lunn, President, of United Small Business Of California- we have an underlying membership of approximately 5000 members.

We believe that California has an unsustainable public employee pension system that will lead to fiscal collapse of our state unless you make major reforms immediately. This situation has been exasperated by tens of thousands of California state workers taking advantage of a perk that pays them pension benefits for years that they don't actually work.

As you know, this state law allows employees to increase their retirement benefits by adding 5 fictitious years- known as "AIR TIME" - onto their public service. They pay a fee for the privilege, and your officials claim the fee is high enough to cover the eventual payout- but their claim is fallacious, as this boost will cost taxpayers millions!

It offers a return that is almost twice what an annuity would pay if purchased on the private market-Scott Hanson, of Hanson McClain, a Sacramento based investment firm said "It's a phenomenal deal for retirees, but it's an absolute fleecing of the taxpayers." It offers a guaranteed 7% to 8% return, as opposed to a 3% return available for similar investments in the private sector.

This bill was such a political payoff; Gov. Davis signed this bill when he was accepting contributions from public employee unions to fight his recall. These union payoffs are the main reason our state is facing fiscal ruin. For example, one of your managers, after 25 years, retires at $100,000 a year; his pension would be $50,000 a year. If that individual bought 5 years of "AIR TIME" at the current rate of $124,000- he or she would receive an additional $9,840 per year for life. In this example they break even at 67. State Actuaries, however, anticipate that the average male will live until 83, and a woman until 86. Using 83 as his death knell, would cost the taxpayers about $160,000 extra!

Another way to look at this ridiculous scam, an employee buys his "AIR TIME" when he is making only $40,000 a year, but retires decades later with a salary of $200,000, this really would throw off the price calculation, because the state would pay his retirement at the $200,000 level. To help stop California's "Death Spiral" and show the small business community that you will take command- You must immediately rescind "AIR TIME" We believe that you and lawmakers have an obligation to place the interests of all Californians above those of public employee unions. We await your reply.

Sincerely,

Malcolm Lunn
President
United Small Business of California

United Small Business
Proclaiming Liberty to America's Small Business
P O Box 3132 St. Charles, IL 60174 - unitedsmallbus1@comcast.net
Phone 877-791-7705 Fax 630-475-3844

 
 
 

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