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California's firefighters are preparing to rise up in mass to defeat Governor Arnold Schwarzenegger and his special interest's proposal to privatize California's pension system and dismantle the California Public Employees Retirement System (CalPERS).

In a move that even its backers agree won’t do anything to solve the state’s fiscal crisis, Governor Schwarzenegger has endorsed a radical, highly partisan and widely discredited plan to scrap the pension system that protects 1.4 million retired teachers, firefighters, police officers and other employees. The governor’s proposal would force all new public employees – including teachers, nurses, janitors, firefighters and police officers – into a privatized system that would guarantee millions to Wall Street investment firms, but provide no guarantees to the retired employee.

The governor’s plan is being pushed by the same financial and ideological interests that are currently advocating President Bush’s plan to privatize Social Security. As with the Social Security effort, the advocates of privatized retirement claim that their plan will stabilize pension costs for government and eventually save taxpayers money. But in fact, any savings will take decades to materialize and in the meantime costs will likely go up, as taxpayers are forced to foot the bill for millions in excessive fees to private mutual fund and 401k managers.

The plan backed by the governor would make California the only state in the nation to offer a 100% privatized retirement system. Nebraska, a state that had privatized retirement for more than three decades, recently returned to a traditional pension system, after an exhaustive study showed that traditional pension systems performed dramatically better than the private plan.

"This will not save state or local governments one penny," said Lou Paulson, President of the California Professional Firefighters. "The only people who will make money off of this proposal are the fund managers who will line their pockets with taxpayer dollars."

Local government officials also criticized the plan, which mandates the shut down of 20 independent county retirement systems. Without the ability to offer salaries comparable with the private sector, retirement benefits are a critical factor in enabling local government to recruit high-quality employees and keep them from fleeing to the private sector.

"There are issues in California’s retirement system, but this approach uses a cleaver where a scalpel will do," said John Gioia, a Contra Costa County Supervisor.

Longer term, switching to a privatized system will cost the state $18 billion in CalPERS investment out of California’s economy. It will also cost the state influence in the nation’s financial community – as the largest and third-largest pension funds, CalPERS and CalSTRS carry tremendous leverage to hold corporate CEOs accountable to their shareholders. The proposal could also dramatically increase the pressure on California’s fragile safety net, as employees outlive their retirement benefits or, worse, neglect to save at all.

""We want to carefully look at these plans and address reform on a comprehensive and professional basis," said Steve Szalay, executive director of the California State Sheriffs Association. "We think knee-jerk efforts shouldn't get any support at all."

California voters have a history of support for providing a stable pension for its public employees. When Governor Pete Wilson stole more than $2 billion from the state’s pension system to balance the state budget, voters responded by passing Proposition 162, which prevented future raids on the state retirement system. Opponents of pension privatization expressed confidence that neither the Legislature nor voters would follow the governor’s highly partisan lead.

"Obviously, we’re disappointed to see that the governor has decided to put partisan special interest ahead of an intelligent discussion about California’s pension system," said Paulson. "But we’re perfectly comfortable taking the case against privatized retirement to California voters."

For more information including background on the war against our pensions please click on the following link: NO on Pension Privatization