This vote is a victory for SEIU 721 members.
Many people worked hard for this win, but one key player was David Green, SEIU 721’s elected trustee on the Board of Investments. David is an LA County children’s social worker and SEIU 721’s elected treasurer. He made the motion to keep the assumed rate at 7.50% for three years.
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We took an opportunity to sit down with David to talk about this victory, how we won and why it was so important.SEIU 721: As the treasurer of SEIU 721, we know you’re a numbers guy, but for those of us who are mathematically challenged, can you explain in a nutshell what this victory means?
David: Sure. This is a major victory because the assumed rate of return directly impacts what the County contributes to the fund. When the assumed rate is lowered, employer contributions go up. If the Investments Board had accepted the recommendations, the County’s costs would have increased by $90 – $180 million a year, or as much as $540 million over three years. This vote ensures the fund’s long term health.
SEIU 721: That sounds like a lot amount of money, but the County is so huge and is actually doing pretty well financially. Couldn’t the County handle a higher contribution?
David: Well, it’s true that the County is in better financial shape now, but a possible $540 million expense would put a serious hit on the general fund. Remember – the economy may be better, but it’s still not as strong as we’d like. Why take an unnecessary chance?
SEIU 721: Well, who on earth would have voted to lower the rate then?
David: I know, right? But you would be surprised. In the end the board voted 6 – 3 to hold the rate steady. Board Chair Herman Santos and trustees Will Pryor, Carolyn Widener, Leonard Unger and Mark Saladino voted with me. Opposed were John Barger, Michael Schneider and Diane Sandoval.
SEIU 721:
It clearly helped the County, but how did the vote help our members?
David: Yes, the savings to the County opens the door for the County to hire more Social Workers, lower social worker to child ratios and protect the safety of L.A. County’s children.
As you know, I am deeply involved in the LA County contract campaign and our recent strike for Child Safety. It’s worth noting that on the same day that the LACERA Board of Investments saved the County hundreds of millions of dollars, the County resumed bargaining with children’s social workers and eligibility workers. They settled a few days later.
While the LACERA victory is not responsible for the strike’s success – the sacrifice of our members over the duration of the strike for child safety is the primary factor – the fact that the County would not have to spend hundreds of millions of dollars was a huge benefit for them. It certainly did not hurt.
SEIU 721: What did it take to win this vote?
David: It took a lot of education. First on my part. I was first elected to the Board in 2011. My main opponent was a sitting trustee who had tried to lower the assumed rate of return despite the County’s warning that doing so would lead to layoffs and furloughs. I made it my mission to learn as much as I could about the fund. So when the actuaries proposed another lowering of the rate, I was prepared to ask hard questions on behalf of the long term interests of the fund, the employer and plan participants.
SEIU 721: It sounds like retirement security is an issue that is very important to you. We know you are the also the chair of the Local’s Secure Retirement Committee. What can other members who want to get involved do?
David: That’s a great question. The work of the committee is expanding. There’s lot’s to do. The first step for any member who wants to get more involved is to come to our monthly meeting at the Local. We meet the second Tuesday of every month.
SEIU 721: Fantastic! What’s on the agenda for 2014?
David: Next year our Secure Retirement program will advocate that LACERA and other funds look at its fee structure to limit large payouts to outside managers. We will need member support to help monitor LACERA investments to make sure they support a healthy economy – for Main Street, not just Wall Street. We know that the most important factor in LACERA’s long term health is a vibrant economy in our communities, our state and our nation.
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For more information about the Local’s Secure Retirement program, contact Mark Klein at 213-368-8601 or mark.klein@seiu721.org for more information. Join us!