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By Paul Losch

PA Employees and Actuarial Matters

Uploaded: Aug 21, 2009

This is a Third Rail Matter, and I understand that as I write this.

The retirement programs that Palo Alto and most other local government entities in California are actuarily unsustainable.

Game theory explains this quite well, and over the last 40 years, the benefits and other compensation very fine municipal employees have received was based on keeping competetive with alternative employers for those they represented, less on accounting for the imperatives in the community they worked for at any present time.

Have things wratcheted up too much?

This is also the model, at least theoretically, in the private sector. Although I perceive the private sector in these parts as being generous when they can be, they also are able to get out of obligations when it detracts from their ability to focus on their core values and mission.

Going forward, what is the right model for CPA employees that attract motivated and high caliber people, and account for the fact that we may need to offer a different compensation and benefits and retirement approach than has been the case in the last few decades?

I will not pass judgement on contracts Palo Alto has had in the past, but I will posit that now is the time to challenge everyone--voters, tax payers, City employees, City management, current City Council Members, and those who aspire to be on City Council.