Columnist Dan Borenstein is one of the few columnists who understand many of the complexities of public pensions, but his Jan. 11 column ("CalPERS planning to gut a key cost-control provision of new pension law") misleads your readers.
He attacks CalPERS' preliminary interpretation of the new pension law that went into effect Jan. 1 and the types of compensation that can be used toward calculating pensions.
Contrary to Borenstein's comment that CalPERS operates "in a parallel universe," our interpretation of this provision is the agreed-upon intent of those who wrote, passed and signed the bill into law.
What he neglects to tell readers -- a fact that CalPERS explicitly shared with him -- is that during the legislative process, CalPERS worked with the legislative committee consultants to answer their questions and enable them to write the bill according to their intent. They agree that the intent was to eliminate some special compensation, but not all of it.
Further, as we prepared our preliminary interpretation recently, we based it on conversations with officials in the Legislature and the administration. The Legislature's intent was never to limit pension calculations to base pay only. Additionally, CalPERS will seek broad public input on the issue of compensation before any interpretations or regulations are finalized.
Borenstein's view that our interpretation of the law will lead to pension spiking is both
In fact, many of the items specifically called out in the new legislation have not been reportable to CalPERS. Pension spiking is also addressed in the new law through a cap on compensation that can be used to calculate a new member's pension as well as requirements to use the average of an employee's highest salary over three years of their career for public agencies and schools.
Lastly, Borenstein is again wrong when he condescendingly claims that CalPERS "absurd interpretation of the new law will ... erode untold billions of dollars of savings that ... CalPERS previously claimed the new law would produce."
The only absurd interpretation here is Borenstein's of what CalPERS actually said in our cost analysis of the bill. CalPERS never claimed that the restrictions on what is included in pensionable compensation would result in significant savings, let alone "untold billions."
Instead, CalPERS wrote in our cost analysis: "We have not reviewed or been able to assess the potential impact of any such changes. To the extent that savings are realized as a result of additional restrictions on pensionable compensation, the savings will be greater than quoted in this analysis."
CalPERS is committed to implementing and administering the laws as they were enacted. Borenstein has rushed to judgment. In doing so, he has supplied his readers with misinformation.
Robert Udall Glazier is deputy executive officer of CalPERS for external affairs.