The Fight for Retirement Security in California

Almost every state seeks to cut retirement benefits for public employees. Faculty need both to understand their retirement benefits and to fight for retirement security for all workers.
By Jonathan Karpf

The twenty-two thousand faculty members in the twenty-three-campus California State University, like most faculty at other public universities and colleges across the United States, are underpaid relative to their years of higher education. An October 2010 report from the Institute for Research on Labor and Employment at the University of California, Berkeley, prepared by Sylvia A. Allegretto and Jeffrey Keefe, found that when total compensation was taken into account—including salaries, benefits while working, and pension and benefits once retired—those with a bachelor’s degree or a more advanced degree are better off in the non-higher-education private sector than in the public sector. Moreover, because the number of years of higher education required for an academic career means that most faculty members begin working at older mean ages than workers outside academia, faculty teaching at higher education institutions experience fewer years of wage earning. Consequently, their non-salary benefits, including pensions and retiree health benefits, are an integral and important part of their total compensation.

In the past five years, no CSU faculty member has received a raise—not even a cost-of-living adjustment— and all of us experienced one year of furlough that entailed a 10 percent salary reduction. In the face of this lack of salary increases, our non-salary benefits within the CSU assume even greater importance; our pensions and health benefits in the California Public Employees’ Retirement System (CalPERS) make up 26 percent of our total compensation. Yet these too have been under attack.

The Political Backdrop

Public employees in California, including faculty members, are not alone in having their pensions and health care assaulted. Between 2009 and 2012, forty-four states have enacted some version of so-called pension reform. Six states have increased the required employee contributions for new employees (Alabama, California, Hawaii, Maryland, New Hampshire, and New York), and seven have done so for current employees (Alabama, Maryland, New Hampshire, New Jersey, North Dakota, Vermont, and Wisconsin). Ten states have increased retirement ages for new employees (Alabama, California, Delaware, Florida, Hawaii, Maryland, Massachusetts, New York, Oklahoma, and Wyoming), while one has even done so for current employees (Maine). Three states have reduced, frozen, or eliminated cost-of-living adjustments to their pensions for new employees (Hawaii, Maryland, and Mississippi), for current employees (Florida, Maryland, and Virginia), and even for those already retired (Maine, New Jersey, and Rhode Island). Eight states have reduced benefit formulas for new employees (California, Maryland, Massachusetts, Mississippi, New Jersey, New York, Virginia, and Wyoming), while two have done so for current employees (New Hampshire and Rhode Island). Two states have changed defined-benefit pensions into hybrids with 401(k) accounts for new employees (Rhode Island and Virginia), and one has done so for current employees (Rhode Island), while two states have eliminated defined-benefit pensions outright for new employees and replaced them with cash-balance accounts (Kansas and Louisiana), and one state (Michigan) has replaced defined-benefit pensions with 401(k)s alone. Michigan also reduced retiree health benefits.

The attack on public employee pensions has been fueled by a public misled about the level of compensation afforded by state pensions such as CalPERS. Fed an almost daily diet of media reports of outliers who receive six-figure pensions, the California public has been misled to believe that such examples are the norm—this despite the fact that the mean CalPERS pension is $26,000 per year and the median CalPERS pension is only $18,000 per year. The rank-and-file workers—the vast majority of CalPERS retirees, be they clerical workers or CSU faculty—are not the ones pulling in six-figure pensions.

But despite such empirical data, certain political forces have manipulated the Great Recession to demonize public-sector workers like CSU faculty and our defined-benefit pensions.

Fifty years ago, the majority of private-sector workers had real retirement security in the form of defined-benefit pensions. Since then, most private-sector workers have been forced out of defined-benefit pensions and into defined-contribution savings accounts, principally 401(k)s—a process that began in the late 1970s and gained momentum when President Reagan dismantled the air traffic controllers union. If one looks into the history of 401(k)s, it becomes clear that they were never intended as stand-alone vehicles that would provide retirement security; instead, they were designed to supplement a defined-benefit pension. Currently, only 15 percent of private-sector workers have defined-benefit pensions, and the majority of workers who still possess real retirement security are public-sector workers, including those in many systems of public higher education.

Republican politicians and the corporate media have manipulated private-sector workers, themselves victims of corporate capitalism, to believe that the Great Recession was caused not by Wall Street bankers operating within a deregulated financial landscape that allowed them to game the system but instead by public employees and our defined-benefit pensions. As a consequence, instead of private-sector workers saying, “I used to have what they still have; how do I gain it again?” they are saying, “I don’t have what they have; why do they deserve it?”

This is the backdrop for the political assault on defined-benefit pensions across the nation, and California is no exception. Here, wealthy conservatives from Orange County in Southern California—assisted by out-of-state money from conservative sources, such as the Koch brothers and former Enron executive John Arnold—have made three separate attempts over the past four years to circulate citizen initiative petitions that would strip public employees of defined-benefit pensions and replace them with 401(k)-type savings plans. Each time these initiatives were tried, they failed, largely as a result of education and organizing by the California Faculty Association (CFA) and its labor allies. The CFA represents 22,500 tenure-line faculty, non-tenure-track lecturers, librarians, counselors, and coaches, and it has fought these initiative petitions in coalition with other public-sector unions.

More recently, however, the state legislature and governor have made two changes that have led to a three-tiered system of pensions for CSU faculty and other California public employees. Those hired before January 15, 2011, still retain the “classic” pension. Those hired after that date and who became members of the CalPERS retirement system before January 1, 2013, are in a slightly lower second tier; their pension benefit factor rises more slowly relative to age at retirement and reaches a slightly lower maximum benefit factor at the age of sixty-three than does the “classic” tier. But with the passage of the 2012 Public Employee Pension Reform Act, those who gain CalPERS membership after January 1, 2013, have an earliest retirement age that is two years older than the other tiers and reaches the same maximum benefit factor as the “classic” tier only at age 67. Such changes will make it even more challenging to recruit qualified faculty members into the CSU system, especially given the high cost of living in most of the urban areas where the bulk of the CSU campuses are located.

But it could have been far worse; the proposals that were initially included in the act were far more draconian than what was finally signed into law. For example, we were able to stop proposals for a hybrid—lower defined benefit plus 401(k)—or cash-balance retirement option for new employees. What follows is a primer on how the CFA, acting in coalition with other unions and organizations, managed to mitigate the most egregious aspects of this so-called pension reform.

The CFA Model

The CFA is an activist, member-run faculty union that is affiliated with the AAUP and is intimately engaged with state politics. We have political action chairs on the executive boards in all campus chapters and a statewide chair for political action and legislation as part of our CFA executive board. This statewide chair works with a paid staff that consists of a political director, a deputy political director, and a legislative analyst, all of whom have established relationships with members of the state senate and assembly. Thanks to these staff members, faculty activists are continually aware of legislative bills that might adversely affect their ability to provide high-quality, accessible, and affordable public higher education. Additionally, our union has outside education lobbyists under contract, who are quite helpful when members of our own staff are spread thin.

I have been a member of the CFA’s statewide Health and Retirement Benefits Committee since 2007. The committee specifically monitors issues that affect our pensions and health benefits, and it is charged with communicating such issues to the CFA membership. We work closely with union staff and meet at the two CFA general assemblies each year, and we communicate by e-mail between meetings. This arrangement helps our union keep our members apprised of threatened changes to pensions and health care.

But successfully organizing faculty members and motivating them to engage in the sort of political actions that can influence legislators—such as lobbying, writing letters to the editor, sending e-mails to legislators, operating phone banks, and walking precincts—requires that they be educated about what they are fighting to defend. In addition to communicating with our members through the CFA website and weekly e-mailed CFA headlines, we have been holding campus workshops to educate our members.

Since 2007, I have been giving pension and benefits workshops on all twenty-three campuses, visiting an average of thirteen campuses every semester. My two-and-a-half-hour workshop has its genesis in the decision of my wife, Kathie Zaretsky, to retire at the end of spring 2007 from her career as a lecturer in cultural anthropology. At that time, neither of us had a clue about the retirement and health benefits to which we were entitled, but, being good academics, we quickly learned what we needed to know to allow my wife to retire successfully. I realized that if I was uninformed about our pensions, then a majority of my colleagues across the CSU system likely were as well, so I spent countless hours reading and digesting CalPERS publications until I was able to give workshops specifically tailored to the needs of CSU faculty.

My workshops focus on the nuts and bolts of retirement and health benefits and provide an opportunity to educate CalPERS members on political threats and the appropriate actions that we can take in response. The workshops also serve a general organizing function: a large group of faculty can be made aware of bargaining updates and campus actions that may be needed to help move contract bargaining along. If a biological anthropologist like me can teach workshops on retirement, many other faculty members in unions and faculty associations across the country can do so as well.

Lastly, the CFA has fought off attacks on our retirement security by forming coalitions with other unions, such as the California Nurses Association, the National Education Association, the California Federation of Teachers, and Service Employees International Union locals. When combating attacks on public workers, we need to get out of our ivory towers and stand with our fellow public workers.

The largest coalition of which we are part in the fight to defend our pensions is Californians for Retirement Security (CFRS), a coalition of 1.2 million public workers in California. CFRS has been at the forefront of the pension fight in California; the CFA is one of the unions on its executive board and sends at least one representative to the monthly meetings of CFRS. Financial support from the unions on the CFRS executive board allows for a statewide response team to react quickly to legislation, initiatives, and editorials that threaten our pensions. These responses can be seen online at

One of the principles of CFRS is that we can’t be concerned only about defending the retirement security of those of us who are fortunate enough to have it; we also need to be working to advance retirement security for all, including those in the private sector. CFRS is working with related organizations in California to create a new service within CalPERS that would allow private-sector workers and their employers to contribute to a fund that could provide a defined-benefit pension, with lower fees and fewer risks than 401(k)s.

None of us of who teach in the public sector of higher education are paid commensurate with our years of higher education. But most of us made a commitment to provide excellent higher education to the working and middle classes of this great nation. Most of us could garner significantly higher salaries in the private sector, but we made a decision to trade higher salaries for increased retirement security. Unless we educate and organize ourselves, the modicum of retirement security we have left may soon be a thing of the past.


Jonathan Karpf has been a lecturer in anthropology at San Jose State University since 1987. He is the lecturer representative for his campus and sits on the Faculty Rights Committee. Karpf also is an officer of the California Faculty Association, where he sits on the statewide bargaining team, the Health and Retirement Benefits Committee, and the Representation Committee.