Wednesday, November 10, 2010

Do Onto Others But Not Onto You

Background: With the late Keith Richman, OC supervisor John Moorlach has been a major figure in the movement to move public employees in California from defined-benefit pension to defined contribution. (Meg Whitman had favored DC and might have put it on the ballot, had she been elected governor. That possibility - a ballot initiative - still exists.)

When confronted with changing his pension to DC, Mr. Moorlach seems to be having second thoughts:

Supervisors Will Study Giving Up Pensions

November 9, 2010, Voice of OC

Newly elected Orange County Supervisor Shawn Nelson made another baby step Tuesday toward his goal of eliminating taxpayer-funded pensions for elected officials.

He talked his colleagues into forming an ad-hoc committee to explore the idea of moving elected officials away from defined-benefit retirement plans and toward 401(k)-style plans.

In his short tenure on the board, Nelson has become the biggest cheerleader for pension reform.

He's concluded that elected officials should get only 401(k)s on top of their six-figure salaries. And he's unveiled a reform plan that would do just that.

Yet Nelson has yet to get full-throated support from his colleagues on the issue.

Supervisor John Moorlach wondered aloud how to balance for FICA (payroll tax) withholdings on a 401(k) versus the existing pension contributions on behalf of elected officials.

He also wondered whether severing pension involvement might not encourage departmental assistants, such as in the assessor's and recorder's offices (bureaucratic positions with specific knowledge), to not run for office.

"I'm with you," Moorlach told Nelson. "But [I'm] wondering what are the unintended consequences."

Nelson responded by saying: "I don't want people going after elective office just to get a good retirement benefit."

Supervisor Pat Bates pointed out that retirement plan changes would probably require legislation. As such, supervisors should consult with their lobbyists and develop a strategy before adopting any new policy.

And, Bates said, elected officials can always just opt out of the pension plan, as both she and Nelson have. "I feel comfortable moving in this direction ... but it needs some refinement," Bates said.

Nelson kept pressing for the board to at least pass a resolution -- like they would to declare Secretaries Day -- saying that the board backs efforts to move elected officals toward a defined-contribution retirement system.

That did get him the support of the board's senior member, Supervisor Bill Campbell, who agreed, saying, "I think it's appropriate to go on record to say that it's the objective of this board."

Yet Campbell said Moorlach and the others raised legitimate points about unintended consequences and legislative strategy.

Moorlach countered by offering the ad-hoc committee.

Nelson opted for the quick win, grabbing a unanimous vote to put he and Campbell in charge of a committee that will strategize the issue with county Chief Executive Tom Mauk and the county's Sacramento lobbyist, Platinum Advisors.


Article at

Looks like John asked the fundamental question:


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