Thursday, August 20, 2009

CALPERS sues Governor over furlough plan

CALPERS pension fund has sued Gov. Arnold Schwarzenegger and other state officials, saying the unpaid three-days-a-month furloughs of its employees are jeopardizing Calipers' ability to serve California's retirees at a time of nonstop turmoil in the financial markets.

It also said Calipers furloughs generate no savings to the state's budget because its 2,000 employees are paid out of the pension fund's internal sources.

Schwarzenegger imposed two unpaid furlough days a month on most state workers in February and added a third furlough day in July. The California Public Employees' Retirement System was trying to cope with the furloughs but "the third day exacerbated the harm," said Calipers spokeswoman Pat Mach.

The furloughs, in cutting employees' wages by nearly 15 percent, have become a huge economic issue. In Sacramento, where nearly one in 10 employees works for the state, the furloughs will take roughly $500 million out of the economy by the time the program ends next June, according to a Bee analysis.

Schwarzenegger spokesman Aaron Clear said it makes no difference that Calipers employees aren't paid out of the general fund. Furloughs help the state's cash flow "regardless of where the employees are paid from," he said.

The Calipers lawsuit joins a host of others that have argued Schwarzenegger overstepped his legal authority by imposing the furloughs.

So far Schwarzenegger has beaten back almost every challenge, fending off suits filed by the giant Service Employees International Union Local 1000 and several other unions. He also successfully sued the state's constitutional officers, such as Lt. Gov. John Garamendi, for refusing to furlough their 15,000 workers.

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