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From: Pacific Research Institute [mailto:[log in to unmask]]
Sent: Wednesday, March 16, 2005 16:01
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Subject: Pacific Research Institute, Capital Ideas, "Death, Disability,
and Deception"


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Vol. 10 No. 11: March 16, 2005


Death, Disability, and Deception


by Anthony P.  <mailto:[log in to unmask]> Archie


http://www.pacificresearch.org/pub/cap/2005/cap_05-03-16.html

SACRAMENTO - Recent hearings on Governor Schwarzenegger's pension
proposal have centered on the claim that death and disability benefits
will be eliminated under the plan. Pensioners should beware that death
and disability benefits aren't going anywhere.

The governor's plan to grant new state and local employees ownership of
individual pension accounts has been penned in two forms, a bill in the
Assembly and an initiative being circulated for signatures. They clearly
state that California will close the existing defined-benefit system in
favor of a more fiscally stable defined-contribution system.
Unfortunately, political trickery has clouded the simplicity of the
initiative's language.

It is the responsibility of Attorney General Bill Lockyer to write the
title and summary of every initiative that crosses his desk. In the
summary for the pension initiative, he writes in a seven-word sentence
that death and disability benefits will unequivocally be eliminated for
new employees.

That one line has opened a Pandora's box, creating anxiety for those who
depend on this income. The hearings in the Senate and Assembly featured
a number of concerned widows who feared a reduction in survivor
benefits. Visibly disturbed by the summary's language, they dismissed
the pension reform as an attack on the families of police officers and
firefighters. Injured law enforcement officers echoed that sentiment,
calling the governor's plan an "injustice." Such rhetoric overlooks the
reality that Mr. Lockyer's statement is simply wrong.

Not only does the language of the pension plan unmistakably state that
this measure applies solely to employees hired after July 1, 2007, there
is no portion of the initiative that proposes the elimination, or even
reduction, of death or disability benefits for the new hires.

The group backing the initiative, Citizens to Save California, released
this statement on the matter: "We do not share the Attorney General's
interpretation. In our view public agencies could determine to offer
death and/or disability benefits for employees in addition to the
defined contribution plan."

The governor seconded that when he said, "I can guarantee you that as
long as I am governor, there will never be any death benefits or
disability benefits taken away. It won't happen."

Despite the Attorney General's misinformation, death and disability
benefits can exist within defined-contribution plans. The state of
Michigan operates under a 401k plan but also provides disability
protection based upon salary and years of service. If an employee must
retire due to the disability, he or she is entitled to no-cost life
insurance coverage plus continued health, dental, and vision insurance.

In the event of a death, survivors will receive distributions of the
employee's 401k account and continued insurance coverage, as well as a
life insurance payout equal to two times the employee's annual salary.
An additional $100,000 is provided if the death was due to an on-the-job
injury.

A new pension system will not leave California's public employees high
and dry. Public employees and their families must not be duped by those
who promote this untruth. The Attorney General of California, the
highest law-enforcement official in the state, should not be in the
fabrication business.


  _____

America's War on Carcinogens

Featuring introductory remarks from
Dr. Bruce N. Ames
Professor of Biochemistry and Molecular Biology, University of
California, Berkeley, and
Senior Scientist for the Children's Hospital Oakland Research Institute

and comments from
Elizabeth Whelan, Sc.D., M.PH., M.S.
President & Founder, American Council on Science and Health
Editor, America's War on Carcinogens

Tuesday, April 19, 2005
7:45 am - Continental breakfast
8:00 to 9:00 am - Program

Special: Bring one guest for free!
visit: http://www.pacificresearch.org/events/2005/04-19-05.html
<http://www.pacificresearch.org/events/2005/04-19-05.html>

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