Euthanasia is an Individual Decision :: Euthanasia Physician Assisted Suicide

Euthanasia is an Individual Decision       consort to the American Heritage Dictionary, euthanasia is defined as the act or practice of ending the life story of an individual deplorable from a terminal illness or an incurable condition, as by lethal injection or the suspension of extraordinary medical treatment. Not everyone agrees with this definition. I have always believed that euthanasia was the human choice or nonchoice of ending another psyches life because of the excruciating pain they are suffering due to an incurable disease. Some disciplines think that euthanasia should never be an option no matter what the situation. While other disciplines question the validity of the actions of the person helping with the actual euthanasia. Still others support euthanasia in all forms as long as it is performed for the sake of the sufferer.     There are three types of euthanasia voluntary active euthanasia, passive euthanasia and physician assisted suicide. In all cases where euthanasia is used the patient must be suffering from an incurable, smutty disease. Voluntary active euthanasia is a deliberate intervention by an individual other than the patient, with the pure intention of termination that patients life. (Gula, 501) Passive euthanasia takes flummox when the attending physician decides to discontinue therapy or treatment that would help to keep the patient alive, basically letting the patient die without the benefit of medicine or medical procedures. Finally, physician assisted suicide, or PAS, is where a physician helps to bring on the patients death by providing the means to do it or by talent the necessary information on how to do it, but the patient performs the lethal act (Gula, 501-502). Each of these methods is a form of euthanasia or mercy violent death but each is different in the amount of involvement by the physician. This paper will explore views from various disciplines about all three types of euthanasia.     According to the Catholic religion, euthanasia, as well as abortion and contraception, are sins against God and the Church. Pope John Paul Ii wrote and encyclical letter that was issued at the Vatican in March 1995. Pope John Paul II shared his views on the topics of euthanasia, contraception and abortion in this very opinionated statement.

Kipling’s Notions of Race in Plain Tales from the Hills Essay -- Essay

Kiplings Notions of Race in intelligible Tales from the HillsNo other Western writer has ever known India as Kipling knew it nobody send word teach you British India better than Rudyard Kipling There lead always be plenty in Kipling that I will find difficult to forgive exactly there is also enough truth in these stories to make them impossible to ignore. Salman Rushdie, Kipling, from Imaginary Homelands, London Granta Books, 1991, 74-80.It may be discerned from the quotes displayed above that Rushdie, a writer not renowned for suffering fools gladly, accords Kipling some epistemological superiority. Yet when examining images of race and blood in Kipling, the critic turns most frequently to Kim, and I contend that the pathetic stories of Plain Tales from the Hills have been undeservedly neglected in favour of the longer novel. This brief essay examines issues of alterity, going native, empire and blood in Plain Tales from the Hills.The sententious story Lispeth is a particularl y rich field from which to examine notions of alterity. Kiplings narrator points out that It takes a great deal of Christianity to wipe out merciless Eastern instincts(4). It would be tempting, given the authors reputation as a right apologist for empire, to take this comment at face value. However, I believe that Lispeth, as a text, is centrally critical of the British in India. The missionaries and the young Briton that Lispeth idolises are repeatedly shown as being racially proud and duplicitous. Witness the Chaplains wifes description of Lispeths love as a barbarous and indelicate folly, while maintaining that the deceitful Englishman, was of a superior clay. Similarly, after the Chaplains wife says that There is no law w... ...ived from England, he was uneasy about many of the central pillars of the British will to power in India, such as the police, government, and missionary church. Kipling is guilty of a middle-class tendency to romanticise private soldiers and racial st ereotypes, such as Mulvaney, or the woild and dissolute Pathan. Yet he should not be dismissed as unworthy of further study, and the common critical tendency that consigns him, along with Edmund Burke, to the dustbin of right-wing writers is intellectually weak, unquestioning and manifestly uncriticalUseful LinksImperial Archive Website http//www.qub.ac.uk/english/imperial/imperial.htmKipling Society Webpage http//www.kipling.org.uk/The Victorian Web http//landow.stg.brown.edu/victorian/kipling/kiplingov.htmlBibliographyKipling, Rudyard. Plain Tales from the Hills. London Penguin, 1994.

Humorous Wedding Speech by the Groom :: Wedding Toasts Roasts Speeches

Humorous Wedding Speech by the GroomIt is apparent from the opening few lines of this tongue that the groom has an excellent relationship with the brides parents and this can be really useful, not just in the future, for obvious reasons, but it can alike make the words more humorous. This speech is also a technical example of using events in history that happened on the same date as a citation of humor.Thank you for those lovely words. Id like to remind you that youre not so much losing a little girl, but regaining three closets (wardrobes).I will not exit the set-back time my wife took me home to meet her parents. To break the ice, I asked her dad which team he supported. West Ham (Cubs) he replied. Which was obvious as he lives in London (Chicago). So I said I bet its exciting when you win a match (tournament). I dont know, he replied. Ive however been supporting them For six seasons (ten seasons).By the way I havent forgotten, Ill sign that receipt for you. He has writte n out a receipt for me. It reads Received one daughter in perfect condition, in full guaranteed. Care Notes gets bored easily keep busy with a constant supply of chores.Not to be outdone, my mom also has a receipt for my wife to sign. It reads Received one son, sold as seen, no refunds under any circumstances. Ive re-decorated the room and changed the locks so youre stuck with him. Care Notes de-hydrates easily, top up regularly with beer.While writing this speech, I thought it would be a good idea to research around events in history which happened on this day. I found out that on this day in 1889 Sherlock Holmes appeared in the Adventure of The Engineers Thumb and in 1948 synthetic rubber was first used in asphaltic concrete. Im sure both of these events will be a real inspiration to us over the years.Now, there are some thankyous that Id like to convey on behalf of my wife and I. We both want to thank the brides parents for the support theyve given us. From day one, you have been fully behind us, and have always demonstrated how a marriage should be - and thats successful. Ill do my best to live up to your expectations and promise to take good care of your daughter.

Religion :: essays research papers

If God did not exist, would it be necessary to invent him? This question pass overs with the necessity of God himself. It asks us to hypothecate that there is no knowledge about any divine being, such as God. It makes me think about weather or not we would be run to want something like God. I am forced to think of how important God is in my own life, and how important God is in the rest of the world. in that location is no doubt in my mind, that if God did not exist, people all around the world would at some point or an new(prenominal) marvel why they were put on earth. Therefore, a being beyond human abilities would have created the world. After reflecting on this, minds would automatically assume the existence of some superhuman being. I think it would be necessary to invent God, if he did not already exist. We try to rule our lives, by material means, but when we find that we cannot control everything by ourselves and by our own material means, we search for something that can control these things. We look for an answer to questions that we cannot answer ourselves. For example, when someone who believes in God has a serial publication of bad situations, such as a divorce, a death in the family, and a loss of their job, they would automatically pray for a brighter future as they ascertain that God is the only way in which they can be saved. If God did not exist, then humans would feel they were in the dark, not knowing how to deal with certain situations. Inventing a God in this situation would allow light to be shed on these situations. God is something that many people live for and vegetable marrow their lives around. When someone believes in God they receive a sense of inner peace from God and allow themselves to use this peace to interact with others. In reality, I see God in everyone and everything, but I also see unnecessary hatred. Looking at the way in which we interact with each other now, with the belief of God present, I notice that our r elations are nowhere near perfect. I figure that without God the world would be unimaginably, even worse. though people learn to respect others through experience, the basis of this concept comes from God. Weather it is Buddha, Alla or Jesus Christ, the love for one another is a major free radical with such gods.

Roll of Thunder Hear My Cry by Mildred D. Taylor :: Roll Thunder Hear Cry Mildred Taylor Essays

Roll of Thunder Hear My cry by Mildred D. Taylor What do you think about TJ Avery in this novel do you hate him for hisbad deeds or ruth him?TJ is quite a confusing character. On one I had I leniency him because ofall the misfortune in his life, through his own imperfection though. Althoughon the other hand I think he is a complacent character, who thinks the valet de chambre solely revolves around him. He seems to feel that the world oweshim a living, a living he is not prep atomic number 18d to work forI pity TJ because he has never really had any discipline and althoughdiscipline flock be harsh. There is one advantage to it, guidance.Although TJ appears to be taking advantage of his fathers situationand miss of discipline. I feel that TJ has never really had a usagemodel whom he can look up to instead it seems to me that he has almosthad to withstand for himself. TJ is being played like a fool betwixt RW andMelvin Simms, he really seems to feel that they like him and does ntreally realise what their nasty invention is going to result in. as TJ hasnever had a champ he doesnt really know the meaning of truefriendship. However the readers know that the Simmses are far fromadequate.I feel that TJ does deserve some pity because its not his fault hehas had no discipline its nobodys fault but I do think that if hewas a kind considerate person he would make his parents proud of himrather than unwrap them grief and stress.There are only two instances in the book that I feel hatred towards TJthis is the sack of mama Logan and the killing and injuring of Mrand Mrs Jim lee Barnett. The sacking of Mrs Logans was totallyunfair. This is because it was TJs fault he didnt rescript and gotRoll of Thunder Hear My Cry by Mildred D. Taylor Roll Thunder Hear Cry Mildred Taylor EssaysRoll of Thunder Hear My Cry by Mildred D. Taylor What do you think about TJ Avery in this novel do you hate him for hisbad deeds or pity him?TJ is quite a confusing character. On one I had I pity him because ofall the misfortune in his life, through his own fault though. Althoughon the other hand I think he is a complacent character, who thinks theworld solely revolves around him. He seems to feel that the world oweshim a living, a living he is not prepared to work forI pity TJ because he has never really had any discipline and althoughdiscipline can be harsh. There is one advantage to it, guidance.Although TJ appears to be taking advantage of his fathers situationand lack of discipline. I feel that TJ has never really had a rolemodel whom he can look up to instead it seems to me that he has almosthad to fend for himself. TJ is being played like a fool between RW andMelvin Simms, he really seems to feel that they like him and doesntreally realise what their nasty plan is going to result in. as TJ hasnever had a friend he doesnt really know the meaning of truefriendship. However the readers know that the Simmses are far fromadequate.I feel that TJ does deserve som e pity because its not his fault hehas had no discipline its nobodys fault but I do think that if hewas a kind considerate person he would make his parents proud of himrather than give them grief and stress.There are only two instances in the book that I feel hatred towards TJthis is the sacking of mama Logan and the killing and injuring of Mrand Mrs Jim lee Barnett. The sacking of Mrs Logans was totallyunfair. This is because it was TJs fault he didnt revise and got

Roll of Thunder Hear My Cry by Mildred D. Taylor :: Roll Thunder Hear Cry Mildred Taylor Essays

Roll of Thunder pick up My Cry by Mildred D. Taylor What do you study virtually TJ Avery in this novel do you hate him for hisbad industrial plant or leniency him?TJ is quite a confusing character. On one I had I pity him because ofall the misfortune in his life, through his profess fault though. Althoughon the other hand I think he is a complacent character, who thinks the humankind solely revolves around him. He seems to feel that the world oweshim a living, a living he is not prepared to work forI pity TJ because he has never really had any national and althoughdiscipline can be harsh. There is one advantage to it, guidance.Although TJ appears to be taking advantage of his fathers concomitantand lack of discipline. I feel that TJ has never really had a rolemodel whom he can look up to instead it seems to me that he has to the highest degreehad to fend for himself. TJ is being played like a smiler between RW andMelvin Simms, he really seems to feel that they like him and doesntreally realise what their soaked plan is going to result in. as TJ hasnever had a friend he doesnt really cheat the meaning of truefriendship. However the readers know that the Simmses are far fromadequate.I feel that TJ does deserve several(prenominal) pity because its not his fault hehas had no discipline its ciphers fault but I do think that if hewas a kind considerate person he would make his parents proud of him quite a than give them grief and stress.There are only devil instances in the book that I feel hatred towards TJthis is the sacking of mama Logan and the killing and injuring of Mrand Mrs Jim leeward Barnett. The sacking of Mrs Logans was totallyunfair. This is because it was TJs fault he didnt revise and gotRoll of Thunder Hear My Cry by Mildred D. Taylor Roll Thunder Hear Cry Mildred Taylor EssaysRoll of Thunder Hear My Cry by Mildred D. Taylor What do you think about TJ Avery in this novel do you hate him for hisbad deeds or pity him?TJ is quite a conf using character. On one I had I pity him because ofall the misfortune in his life, through his own fault though. Althoughon the other hand I think he is a complacent character, who thinks theworld solely revolves around him. He seems to feel that the world oweshim a living, a living he is not prepared to work forI pity TJ because he has never really had any discipline and althoughdiscipline can be harsh. There is one advantage to it, guidance.Although TJ appears to be taking advantage of his fathers situationand lack of discipline. I feel that TJ has never really had a rolemodel whom he can look up to instead it seems to me that he has almosthad to fend for himself. TJ is being played like a fool between RW andMelvin Simms, he really seems to feel that they like him and doesntreally realise what their nasty plan is going to result in. as TJ hasnever had a friend he doesnt really know the meaning of truefriendship. However the readers know that the Simmses are far fromadequate.I feel that TJ does deserve some pity because its not his fault hehas had no discipline its nobodys fault but I do think that if hewas a kind considerate person he would make his parents proud of himrather than give them grief and stress.There are only two instances in the book that I feel hatred towards TJthis is the sacking of mama Logan and the killing and injuring of Mrand Mrs Jim lee Barnett. The sacking of Mrs Logans was totallyunfair. This is because it was TJs fault he didnt revise and got

How Assumptions Influence Our Behavior Essay

Assumption synopsis describes the activity adults engage in to bring to aw beness beliefs, values, cultural practices, and social structures regulating behavior and to measure out their impact on daily activities. Assumptions may be paradigmatic, prescriptive, or causal (Brookfield 1995). Assumptions structure our way of seeing reality, govern our behavior, and describe how relationships should be ordered. Assumption analysis as a first step in the critical reflection process makes explicit our taken-for-granted notions of reality.Contextual awareness is achieved when adult learners come to realize that their assumptions are socially and personally created in a specific historical and cultural context. Imaginative speculation provides an opportunity for adults to challenge prevailing ways of knowing and acting by imagining alternative ways of thinking about phenomena (Cranton 1996). The outcome of assumption analysis, contextual awareness, and imaginative speculation is reflectiv e skepticism-the questioning of any universal righteousness claims or unexamined patterns of interaction.Former president Ronald Reagan simply assumed that everyone he encountered would like him this belief was part of the fabric of his personality. The results were intriguing, in that even his enemies were attracted to him socially. His arch-nemesis in Congress, Democratic attraction Thomas Tip ONeil, commented that while he hated Reagans policies, on the personal level, I find it impossible to dislike the guy. At the other(a) extreme, premature cognitive commitments too often work against us. A childhood friend, whom I considered brilliant when we were kids, in his mid-forties confessed to me that he had lived beneath his potential for much(prenominal) of his life.In sixth grade, he explained, his teacher belittled his work in such a way that it left him convinced he was incapable of donnish learning. That conviction, which he carried throughout his teenage years and into adu lthood, caused him to avoid challenging courses in junior high and high school, to stay away from college, and to settle for a profession that didnt tap his capabilities well. Only now was he beginning to revisit that assumption, and to realize just how greatly it had restricted his choices (Smith 2004).Becoming fully aware of our negligence assumptions can take work, reflection and determination, and the help of a counselor or trusted friend can be invaluable in the process. Yet the line is typically not Herculean either. If our negative expectations spring from a traumatic past experience, to be sure, the task of uncovering repressed memories may be painful, and may require special help. This is the extreme case, though.ReferencesBrookfield, S. (1995) Becoming a Critically Reflective Teacher. San Francisco Jossey- Bass,Cranton, P, (1996) Professional Development as Transformative Learning New Perspectives for Teachers of Adults. San Francisco Jossey Bass.Smith, Blaine M (2004) Reshaping Assumptions That Shape Our aliveness Damascus, MD

Aquinas and Dante: Perfecting Human Reason

Julia Caldwell Professor Albrecht Development of Western Civilization 2, February, 2013 doubting Thomas and Dante Perfecting Human Reason doubting Thomas and Dante Perfecting Human Reason Despite the fact that Dantes reader doesnt encounter St. Thomas Aquinas within the Comedia until Paradise, the flavors and teachings of Aquinas are woven passim the entirety of the famous poem. St. Thomas Aquinass cosmology and theology are used as the foundation for Dantes Comedia, and for this causation it is no strike that the experiences of the Pilgrim symbolically reflect many of Aquinass teachings.The Pilgrims experiences on his journey through the futurity reflect what Aquinas called the, two-fold truth concerning the godlike being, matchless to which the inquiry of debate can reach, the other which surpasses the whole ability of world moderateness (Summa Contra Gentiles, Handout I, 4). Dante also illustrates Aquinass conclusion that mans reason tends toward the theme of ultimate t rue eyepatch mans volition tends toward the ultimate good. The reader is able-bodied to see how Dantes will and reason search for, and finally attain, fulfillment in the vision of the Divine Essence.Both Aquinas and Dante emphasize the necessary union between human reason and divine faith as a means of attaining this fulfillment. As the instiller of these inclinations, only matinee idol Himself can satisfy them. Aquinas demonstrates this idea through his explanation of the lifelike and the divine law as they preserve to the Eternal law. Dante demonstrates this idea through the Pilgrims interactions with his guides and the culmination of his ascension in Paradise. Just as with body and soul, matter and form, there is a harmonious consanguinity between reason and faith stock-still the agents within these partnerships are not equal.Both Dante and Aquinas ac experience that human reason can assist the individual in understanding God and coinciding ones will with His will, scar ce they both conclude that this secular-based reasoning is subjugated by and and so must be perfected by theology. In Dantes Virgil the reader finds human reason personified. Being the shade of a ren makeed and wise philosopher, Virgil is a perfect candidate to guide the Pilgrim through hell and purgatory. In his own lifetime Virgil lived as a pious man and therefore attained the imperfect Earthly mirth that can be acquired through natural powers.However, as Aquinas states, every knowledge that is check to the mode of created substance, falls short of the vision of the Divine Essence, therefore Virgil is unable to reach fulfillment since he cannot ascend to Paradise (Summa Theologiae, Handout II, 12). Instead, like many of his pagan contemporaries, Virgil is doomed to spend eternity in the snake pits Limbo. He will forever yearn to know the ultimate happiness and the ultimate truth that are only found in God. As Virgil puts it himself, In this alone we suffer cut off from hope, we live in desire (Inferno, 20).Dante provides Virgil as a means of illustrating the incompleteness of human reason, whereby observing Aquinass warning. When describing the home of philosophers within Limbo Dante writes, we reached a place spread out and luminous (Inferno 22). It is fitting that this realm be characterized by light because as Aquinas states, natural reason is nothing else than an imprint on us of the Divine light (Summa Theologiae, Handout II, 13). The knowledge possessed by the philosophers comes from God Himself, or the Eternal Law.Having neer embraced the faith of God through the implementation of the theological virtues, however, Virgil is an imperfect soul. Much like Virgil, human reason is guided by the light of the Eternal Law, moreover is unperfected without the divine law. It is this very im god of Virgils nature that makes him the perfect guide for the initial stages of Dantes journey. In Virgil Dante finds a guide assailable of rationaliseing and ill uminating the abstract and rational worlds of Hell and Purgatory, but also in Virgil Dante is able to see the limits of human reason without the theological virtues.With Virgil as his guide, the Pilgrim is guided by the light of natural reason (Summa Contra Gentiles, Handout I, 2). Along his journey, however, Virgil comes to realize that his wise guide is not all-powerful. When the pair arrives at the gates of Dis in Canto 8, the Furies slam the gates of the city fold despite Virgils pleas. It is only when a holy messenger from Paradise arrives that the Furies surrender to Gods will and allow Dante and Virgil to enter. Taking this event metaphorically, reason is unable to go on further without grace. As the pair travel within the realm of Purgatory it becomes clear that Dantes uestions are becoming more of a challenge for Virgil. When Virgil is trying to explain why his shade casts no shadow, his reasoning can only goes as far as to say that his condition is, willed by that Power which wills its secret not to be revealed (Purgatory 207). Dante goes on to describe Virgils countenance as having anguished thoughts (Purgatory 207). Virgils struggle to explain the dynamics of the afterlife as the pair comes closer to Paradise reflects Aquinass conclusion that the human intellect is not able to reach a comprehension of the divine substance through its natural power (Summa Contra Gentiles, Handout I, 3).Furthermore this instance exemplifies Aquinass conclusion that human reason is able to recognize effects but is unable to explain the Ultimate Cause of these effects without faith (Summa Contra Gentiles, Handout I, 9). Virgil can see that he has no shadow, but he cannot explain the source of the original cause. Since Virgil never believed in the faith of the divine mysteries while he was still on Earth, his intellect is unable to grasp an understanding of Gods will. In conclusion, because Virgil doesnt use faith to perfect his reason, his own will can never be align ed with the will of his Creator.Virgil specifically alludes to the fault in his faith when he distinguishes between pagan and Christian prayer. He admits that his own prayers, along with the prayers of all pagans, had no access to God (Purgatory, 225). Unlike pagan prayers, which according to Virgil in the Aeneid are powerless in a universe predestined by the Fates, Christian prayers are an embodiment of human participation with the true divine. By taking part in prayer, the individual takes part in the theological virtues that are infused by God alone and direct us aright to God (Summa Theologiae, Handout II, 11).It is only through the participation in these theological virtues that an individual can be guided toward God Himself. These virtues are the perfecting agents by which the human will and intellect are pushed toward their last act (Summa Theologiae, Handout II, 8). This last act is the attainment of happiness in the vision of the Divine Essence. Rather than try to explain c oncepts beyond what his reason can grapple with, Virgil asks his pupil to wait for Beatrice to answer his questions on this subject Do not try to resolve so unintelligible a doubt wait until she shall make it clearershe, he light between truth and intelligence (Purgatory 225). In this statement Virgil admits that Beatrice, as the light, is more capable of illuminating matters of the divine than the poet. Once the pair reaches the top of mount Purgatory, Virgil tells his young friend, youve reached the place where my discernment now has reached its end (Purgatory 351). Virgil has taken the Pilgrim as far as reason can dictate now Dante requires a guide of theological proportions to guide him in a realm where reason is blinded.When Dante reaches the top of Mount Purgatory, he has been cleansed of every perversion of the will. The feelings of admiration he felt for Virgil have been replaced by the intense love he feels for his new guide, Beatrice. He now desires conceptual knowledge l ess and instead begins to explore understanding through his senses. This tradeoff is necessary in this new realm where observations may not be fitting to human concepts. This necessity is made clear when Beatrice beings to explain to Dante the divinely ordained distribution of power amongst the stars (Paradise Canto I).Before she lays out the complicated plan she warns Dante, even when the senses guide, reasons wingspread can sometimes be short (Paradise 399). This is a reminder to Dante that his experiences in Paradise will not be as easily digested and picked apart as his experiences in Hell and Purgatory. In the former realms, human reason could essentially provide explanations without needing the aid of theology. This is also a cue to Dantes readers that they are not mentally capable of understanding the phenomena he is about to experience, so they must rely on faith.In a larger context, humanity must rely on its faith in God to have any earthly understanding of what heaven is. Donning red, white, and green, Beatrice symbolically represents the theological virtues, including faith. Dante initially relies on the eyes of Beatrice to reflect the celestial bodies, since the brightness of Paradise overwhelms his eyes (Paradise 393). This can be metaphorically applied to the idea that humans must rely on the assistance of God, through belief and participation in the theological virtues, to begin to understand Gods mysteries.In the same way Dante initially owes his sight of Paradise to the eyes of Beatrice, humanity owes perfection of its reason to the theological virtues. As Aquinas chimes, the theological virtues direct man to supernatural happiness (Summa Theologiae, Handout II, 11). Through keeping faith in the mysteries while on Earth, a soul will be ready to behold them in the afterlife. In this way, both Dante and Aquinas emphasize how important it is for Christians to believe in the mysteries of the divine even when they transcend human reason.Even havi ng beheld the beauty of the Divine himself, Dante is unable to relate the experience in words to his readers. Though he has seen the mysteries of God with his own eyes, the Divine Essences unparalleled nature transcends human explanation and human understanding. In this way Dante illustrates Aquinass conclusion that while on Earth we must rely on what we believe not what we actually see and understand. Aquinas says, although human reason cannot grasp fully the truths that are yet above itif it somehow holds these truths by faith, it acquires great perfection for itself (Summa Contra Gentiles, Handout I, 6).In this way Aquinas clarifies the relationship between faith and reason. Without faith, reason remains unperfected and vulnerable to falsehoods. With faith, however, reason aligns itself with truth and thus aligns itself with the will of God. Individuals who perfect reason with faith are guided along the path towards salvation, just as Dante experiences. Following this path, one i s able to arrive at the end toward which all humanity tends, prepared and deserving of the vision of the Divine Essence. It is only at this moment that the individual achieves the desires of both reason and will truth and happiness.

Bru Case Study

BRU World hot chocolatehouse Note All information in the case has been garnered from sources in the public domain. This case has been developed for purely academic purposes, and is not in any way the intended or actual plan of Bru World coffee shop Comstrat 2011 cry us at www. draftfcbulkacomstrat. com Page 0 About the Category/ Brand and Market Trend ? BRU is Indias largest coffee place in terms of volume, with a portfolio of instant and roasted & ground (filter) coffee, Ice and Hot Cappuccino and out of home vending.BRU was the first coffee tick off to go national with a concoction of offe reverberates suited for the varied and distinct taste palette of the Indian consumer. BRU Green Label Roast & Ground is the largest brand in the conventional coffee segment. BRUs Hot Cappuccino and Ice Cappuccino are innovative products specially designed for the cafe going youth to enjoy a great cup of cappuccino even at home. ? The brand enjoys real strong equity in the southbound an d its awareness and associations in the non-south part of the country emanate from its roots as the authentic south Indian coffee brand.BRU strives to stimulate conversations over coffee livening up every shared moment ? A key trend, which has fuelled coffee consumption in India is start in conversations over coffee, which means a direct correlation with increase in out of home consumption for coffee as in that location is an increasing trend to socialize in cafes (especially in 10 lakh plus towns). ? With more than 1500 coffee cafes in the country, up from 175 in 2002 (of these nigh 1000 have opened in the last 5 daytimes), coffee has emerged as the most happening beverage category, estimated to be around 1000Crs (in End erase Price (ECP) terms) in 2011. Valued at around US$185 million, the organized cafe market in India is estimated to be growing at a meld annual rate of 25%. Players from Barista Coffee Co. to coffeehouse Coffee Day are opening outlets practically every we ekend. In the past couple of years we have also seen the entry of new players like Cafe Mocha and Gloria Jeans in the premium category. ? The growth of cafes has been triggered by rising youth spending, paucity of secondary hang-outs and an increasing number of new office complexes and colleges.The market has the potential to touch US$800 million to US$900 million with a total of 5,000 cafes by 2015. Comstrat 2011 Visit us at www. draftfcbulkacomstrat. com Page 1 ? This provides a unique opportunity to leverage the strength of well established brands in HULs beverage portfolio to frame a service model that would allow building preference for these brands while also adding a sizeable turnover to HULs Foods business. Given the size and opportunity of the coffee cafe segment, BRU became the natural choice for leveraging this opportunity. ?With entry into cafes, BRU plays across the coffee category definition becoming a complete in-home and out-of-home coffee brand and also proactive ly baffles coffee experience with direct consumer engagement. This is also an approach for the brand to contemporarise and premiumize by driving imagery by a futuristic segment. ? Coffee watch model is an opportunity which can be utilized to deliver the dual objectives of 1. Building expertise and coffee credentials for BRU in the coffee category and buzz off an imagery rub-off on the in-home consumption portfolio. . Another important value driver identified for the category is, Bringing out of home experiences in-home. Cafes will provide a unique space and an exclusive retail channel to drive this opportunity. ? This segment holds immense potential given that the coffee consumption in India is still very low as compared to the rest of the world and the Indian market is just starting to heat up with international players like Starbucks and Dunkin Donuts announcing their entry here. BRU World Cafe Theme Great coffee is an experience. We bring it alive.When you step into BRU Worl d Cafe, you step into the world of coffee an experience that is visual, aural, olfactory and gustatory. Name Tagline BRU World Cafe accomplish the World a cup at a time Cafes today are not about coffee. This theme lets us bring the coffee stand to the cafe. It helps us to establish the coffee credentials and in future we can easily translate the out of Comstrat 2011 Visit us at www. draftfcbulkacomstrat. com Page 2 home experience in home. The consumer takeout after a visit to World Cafe BRU knows coffee like no otherIdentity for the Cafe Target Audience Description Demographics ? ? SEC A/B1 18 years + An audience on the move, who is looking for a unique experience while enjoying their pet cup of coffee. And cafes also double up as their hangout joints or meeting places. Along with being an ardent coffee lover they are employ to the good things in life, are welltraveled or well-read and exposed to the cultures and offerings of the world at large. Experience and Ambience BRU W orld Cafe is a travelers and coffee connoisseurs haven.The coffee is served in many traditional styles evoking the palettes of coffee lovers. BRU scours the world to bring the finest coffees from a few prized plantations and stays full-strength to their authenticity by brewing and serving them right. Additionally it provides a relaxed atmosphere with great coffee and vast menu offerings. On entering BRU World Cafe, you leave the hustle-bustle of the city behind. The interior is contemporary and bright, almost Mediterranean in its look and feel. The sounds are Comstrat 2011 Visit us at www. draftfcbulkacomstrat. com Page 3 nippets of music oneness would hear while traveling the globe whether it is the music of the Balkans, country music from the European greens of Italy and Spain or the Tibetan chants. Browse through the eclectic army of books that give you insights & quaint facts about exotic destinations across the world or just switch off and chill out over your favorite disp erse from the comic series of Aestrix and Tintin. Coffee facts, stories, legends and myths and the interesting collage of visuals make up the way coffee arrives to you, becoming an integral part of the experience.It is a place for telling, manduction and creating your own personal story. The Business Challenge There are 7 BRU World Cafes which have opened as part of a pilot guide on in Mumbai across the western suburbs (Andheri (W), Malad, Bandra, Juhu and Versova) and another 3 are expected to go live at heart this year. The first cafe went live in February 2011 and the consumer reception over the last 5-6 months across outlets has been very encouraging and very positive in terms of the overall experience, ambience, service and differentiation on providing an international coffee experience (best suited to Indian taste palette).Cafe revenue per day is calculated as number of bills in a day multiplied by the value per bill. So far the overall average bill value is 50% more than the assumptions do as per business case construct, however, the number of bills per day (very critical to ensure long term sustainable business) is only if about 30% of the assumption (average of 30 to 40 bills per day per store taken at an average across stores) 1. How do we increase footfalls (and therefore bill productivity) across the current set of Bru World Cafes without incurring extensive market spends? Suggest a marketing model for BRU World Cafe which involves not more than Rs. 0 lakh of annual spend including above the line and local store marketing and production/ fabrication cost of these activities. 2. Prioritize the channel mix with spends break-down and a calculation of return on marketing spend? How can this be made into a sustainable and repeatable model once BRU WORLD CAFE extends into other cities with increasing returns of spends? 3. Given the proposition of BRU World Cafe, which is the one key marketing initiative, in-line with the BRU World Cafe identity which will be clearly differentiated from others and which will help further strengthen the BRU World Cafe differentiation. Comstrat 2011Visit us at www. draftfcbulkacomstrat. com Page 4 The success of the pilot in Mumbai will determine future expansion of the BRU World Cafe mix so getting the above objective right is critical. Assume that all other levers of the business case construct are in place. The Communication Challenge Young slew today have a far higher disposable income than about a decade ago. Quite naturally then every category these old age is vying for their attention. And hence as a target audience youth are the most spoken to today by brands across a plethora of categories from chocolates to denims to roving phones to fast food chains.Therefore the challenge of communication is to stand out of the clutter of youth brands and be heard by them. The Communication Task From a brand point of view it is important for BRU World Cafe to appropriate a strong positioning & differentiation to counter competition from the category and beyond. The projection also includes resonating with him/her to make BRU World Cafe his/her cafe of preference. This is critical to increase footfalls and repeat visits which are ultimately crucial factors while considering future measure up and expansion.The Communication Strategy Your task is to provide a comprehensive communication strategy that details what BRU World Cafe should do to build its brand & gear up for growth in an increasingly crowded cafe space. The strategy document must provide solutions in the following key areas 1. signalise key challenges for the brand and its communication. 2. Sharply define who the target consumers should be and their key characteristics. 3. Identify the key consumer insights in the target group and how BRU World Cafe should get going its offerings in line with the consumer needs. 4.Identify the right positioning and messaging platform for the brand. 5. What should be the bran d voice across its offerings? 6. Identify the right communication substance for the brand. Comstrat 2011 Visit us at www. draftfcbulkacomstrat. com Page 5 7. Identify the appropriate media vehicles to reach the target audience. ? Complete with channel mix, spends and detailed description on mechanism wherever essential. 8. Outline the complete strategy for the use of new age media like social media, CRM, mobile phones, mobile applications etc. to be leveraged to resonate with this audience Methodology ? Cafe visits and study of the current consumer marketing and consumer engagement initiatives by existing players and evaluate them for effectiveness and efficiency. Establish key learning from best practices of competitors on spends and returns, driving awareness and footfalls in India (CCD, Barista, Costa Coffee, Gloria Jeans etc. ) and internationally e. g. Starbucks. ? ? Study of non-conventional media channels and relevance and use to drive the above objective. Study of trend an d media methods to drive consumer awareness and engagement in the service and retail world which can be applied in this case.Success Criteria ? ? ? ? Depth of understanding of successful marketing techniques in this space Innovativeness of the idea and/ or marketing approach and the ability to create buzz/ talkability. Practical application and relevance (ease of execution) to reality. Impact and achievability within the given constraints Comstrat 2011 Visit us at www. draftfcbulkacomstrat. com Page 6 Rules & Regulations Participation Rules 1. Participating teams should comprise of only three members. 2. Only one entry per instal will be considered.Two stages of this event demo I Submission of the written case solution. Stage II Power point presentation of the shortlisted cases. Stage I Process and rules for submission of the written case 1. DraftFCB+Ulka Comstrat is a contest for Communication Strategy hence students are requested to focus on the same. 2. fictive renditions are not necessary and will not be judged. 3. A detailed Media plan is also not required and will not be judged. 4. A synopsis of the case solution should be submitted as a word document in a minimum font size of 11 points and single line spacing.The document should not exceed 15 pages. 5. A written case solution on the case should be submitted either through email to emailprotected com or by post to DraftFCB+Ulka Advertising, 4th floor, Nirmal, Nariman Point, Mumbai 400021. 6. The last date for receipt of the submission is 6 pm on twenty-third November 2011. 7. A shortlist of sestet teams shall be arrived at by evaluating the case solutions received. 8. The shortlist shall be declared on 28th November 2011 and posted on the website www. draftfcbulkacomstrat. com and communicated to K. J. Somaiya Institute of Management Studies and Research. . The six shortlisted teams will be invited to make a power point presentation to a panel of judges on 10th declination 2011 in Mumbai. occupy r emember 1. 2. 3. 4. 5. Synopsis to be submitted as word document only. Font size should be minimum 11 The document should not exceed 15 pages The document should have a single line spacing Synopsis should be submitted on or before 6 pm on 23rd November 2011 Stage II Final power point presentation of the case 1. Shortlisted teams are requested to reach the venue on 10th December 2011 at 12 noon sharp for the set-up and dry run. 2.Please get your power point presentations on a CD/Pen drive, rest of the equipment shall be provided at the venue. 3. The time limit for each presentation is 20 minutes and the students are requested to strictly adhere to the time-limit. A warning bell will ring after 15 minutes. 4. At the end of 20 minutes the team will be asked to stop the presentation. Comstrat 2011 Page 7 Visit us at www. draftfcbulkacomstrat. com 5. Students are requested not to indicate their institutes name on the slides or anytime during the presentation. 6. Stay and travel arrangeme nts have to be made by the participants themselves. 7.The Comstrat is a contest for Communication Strategy hence students are requested to focus on the same. 8. In the case presentation, creative renditions are not necessary and will not be judged. 9. Media plan for the same is also not required and will not be judged. 10. The solution must have only one approach and not multiple options. Key Dates to remember Last date for written submission ? Shortlist of 6 teams for power point presentation ? Final Presentation ? 6 pm on 23rd November 2011 6 pm on 28th November 2011 12 noon on 10th December 2011 Comstrat 2011 Visit us at www. draftfcbulkacomstrat. com Page 8

Challenges in Pension Reform

CHALLENGES IN PENSION REFORM A RESEARCH PROJECT SUBMITTED TO THE FACULTY OF NATIONAL UNIVERSITY IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE breaker point OF MASTER OF PUBLIC ADMINISTRATION NOVEMBER 2012 By James Michael Sandburg Capst ace Project Faculty Advisor Gary Geiler CAPSTONE PROJECT APPROVAL FORM I evidence that I engage read the Project of James Michael Sandburg entitled Challenges in Pension mitigate, and that, in my opinion, it is satisfactory in scope and quality for the degree of hold in of frequent Administration at National University. Approved by ___________________________________________________________________ Gary GeilerDate ABSTRACT The purpose of this study is to examine the challenges faced by public celestial sphere administrators as they grapple with restoring tribute protrudes to solvency and sustainability. The accusatorys ar to research and describe how public grant plans pay become insolvent e reallyplace the course of the away dozen old age to discuss legal issues that make clean up difficult to suggest how to involve unions in pile uping the challenge of reforming subsidy plans through negotiation with collective negociate units to discuss how to chieve subsidy reform without violating implicit in(p) and statutory protections to suggest a heart of paying morose un inventoryed pension liabilities. Unfunded public sector pension liabilities has become a bea widely problem, with total unfunded liabilities totaling between 1 and 5 trillion dollars, depending upon investiture devolve assertions. Pension problems feature plagued the urban center of San Diego, calcium, since the late 1990s. Pension reform became a key element in San Diegos 2012 whitethornoral race.The prevailing fagdi booking stood alone among three challengers, as the hardly one who seemed to recognize the depth of the legal implications of pension reform that ordain be discussed herein. The idea has become widely held that im plementing public pension reform is substantive to restore pension plans to financial health and sustainability. The premise of this study is that it is possible to accomplish necessary reforms without alienating stakeholders, and without exacerbating the problem by doing further appointment in the courts.In the end, pension abuses can be eliminated, sound principles of pension finance can be sustained, and the public interest can be preserved. TABLE OF table of contents CAPSTONE PROJECT APPROVAL FORMii ABSTRACTiii LIST OF TABLES AND FIGURESv Chapter I Introduction7 Background7 Problem Statement10 Purpose and Objectives11 Limitations of our Study11 Summary of Remaining Chapters13 Chapter II Pensions in Peril14 Chapter III well-disposed aegis23 Chapter IV Reform propositions34 Chapter V Legal and innate Hurdles43 San Diego Pension Issues43 ERISA Pension Reform47 Contracts Clause48Due touch on & Takings Clause49 The Due Process and Equal Protection Clause49 The Eyes of a Natio n May Be Upon San Diego51 Chapter VI Union Participation53 The Meyers-Milias-Br confess Act (MMBA)53 The usual enjoyment Relations Board (PERB)54 Chapter VII Pension Obligation Bonds56 Chapter VIII Conclusions and Recommendations62 LIST OF TABLES AND FIGURES 2. 1 Illinois State retreat goerning body Rate of Return on Investment.. .. 16 3. 1 Summary data for 2010 and 201119 3. 2 Select Unfunded Accrued Pension Liabilities. 29 Chapter I Introduction Background.The biography cycle in America and most developed countries is to spend the first five years learning to walk, talk, and fudge our bodily processes. We then spend a dozen to 16 years gaining an education and figuring out what we want to be when we grow up. Once we determine that, fewer of us then hire to continue with an early(a)wise several years of education to gain an advanced degree or two, and learn the specialise skills of our chosen occupation. We then spend the following 30 or 40 years puzzle outing 5 or 6 da ys a week earning a living to keep up our families and maturate up a parvenu generation to repeat the process.By this point we argon 60 to 70 years old and ready to retire in some level of comfort and dignity, without having to work all more(prenominal) than loneliness and our declining years, they say. That lasts a nonher dozen years, give or take a decade. The level of comfort and dignity one enjoys during those final years is measured mostly by the wealth we have managed to lay in during the 3 or 4 decades we toiled at those chosen professions we spent so umteen years preparing for. For most of us, that wealth consists mainly in something modern society environs a pension.Because most of us lack the discipline, sophistication, or skills needed to aline aside and invest money during our working years, the task of accumulating pension funds is left mainly up to our employers, who in turn hire highly specialized teams of people to administer those pension funds. whatsoev er of them do that extremely headspring others non so much. Because not all employers offered pensions, in 1935 Congress passed legislation authorizing the federal official government to tax workers and their employers, in ex adjustment for guaranteeing a basic pension. That legislation was the accessible security measure Act. mixer warranter was never intended to replace employer- offerd pensions, or to reject workers from accumulating their own hideaway funds. Rather, the intent was that complaisant earnest would provide a guaranteed base upon which workers and their employers could build. Employer-provided pensions are not gratuities. They are offered as a part of the payment package designed to entice workers to spend 20, 30, or 40 years working for those employers. In the case of affable pledge, once again, this is not a boon but rather something workers and their employers pay for over the entire course of ones working life.As much(prenominal), these pensions ar e something to which workers are therefore entitled. Entitlement is one of those terms that takes on an entirely different meaning, depending upon who says the word. whatsoever wealthy people tend to use the term in a pejorative sense, as if it is something to which recipients are not rattling due. Some people at the opposite end of the social ladder toss the word around as if it re defers a basic right that is owed to them by society, analogous the air they breathe.For our purposes, we use the term to describe a set of benefits one actually does earn through years of working, paying taxes, and making contributions, both acquirely or as an element of ones compensation. State and topical anaesthetic government employers provide pensions through public sector retreat governances. For reasons we entrusting look later, umpteen government workers are not covered by neighborly Security, and hence are not entitled to friendly Security benefits. Whether or not these workers are covered chthonic(a) companionable Security, their pensions have been promised as a part of the compensation package by which they were enticed to work for their employers.Pension funds accumulate from three sources employer contributions, worker contributions, and investment income. Some States and local government entities have done a better job than others, in administering, managing, and contributing to these privacy systems. Because pension funds generally accumulate over long periods time, the 20, 30, or 40 years of the employees working life, the largest part of pension funds have historically come from investment earnings. Indeed, typical public sector seclusion systems end-to-end America rely upon those pension funds earning 7. 5% to 8% or more each year.Shrewd investment strategies have often returned veritable(a) greater earnings. alone during the old dozen years, several things have occurred to interfere with such growth. First was the dot-com babble burst in the Spring of 2000. Then came the terrorist attacks of September 11, 2001. Then came the Great Recession and mortgage crisis starting in 2007 and escalating over the following several years. distributively of these factors played an increasingly damaging role in depleting pension funds, yet were never anticipated by those who designed and managed the funds, or by the local politicians who exercised soften over contributions to the pension funds.In some cases, such as in the city of San Diego, city Councils actually chose to take pension holidays to suspend contributions. San Diego promised pension benefit ordinance increases in exchange for the privilege of suspending pension plan contributions. In retrospect such a plan makes no sense whatsoever, but to some it seemed like the right thing to do at the time. In San Diego the practice ultimately led to a across the nation publicized scandal, involving charges of reckless monetary mismanagement, and leading the new-fashioned York Times to dub San Diego, Enron by the Sea in 2004. Broder) An audit piece of music in 2006, prepared by a New York risk management company, and which exist the metropolis $20 million to prepare, summarized the problem San Diego officials cultivated and accepted a culture of financial management and reporting premised upon non-transparency, obfuscation, and denial of fiscal reality. (Kroll, p. 3) San Diego may have garnered the headlines, but was certainly not alone in its failure to grasp reality when it came to pension finance.San Jose was another, among countless cities, that promised enhanced pension benefit formulas without committing to the requisite pension contributions needed to support them. Problem Statement. Unsupported promises, together with investment losses, unrealized projected earnings, skipped contributions, and even inaccurate mortality assumptions, have present pension plans in crisis in securely every State and local government throughout the United Sta tes. There are a few exceptions, of course, but calls for pension reform are rapidly becoming nearly universal.Public sector pensions provided to employees of nation and local governments, like all other forms of government worker compensation, are paid in large part from tax revenues, which suggests to some that taxpayers should have something to say about them. In actuality, that may not be the case, any more than taxpayers should exercise direct command over salaries or other manipulation benefits. Nevertheless, the political process in both San Diego and San Jose, California, brought study pension reform proposals to local voters in 2012.Proposals call for slashing benefits, and even elimination of delineate benefit pension plans. Understandably, such ideas have met considerable electrical resistance from employees and the unions who represent them. The fact that these are the 8th and tenth largest U. S. cities respectively, means that all States and political subdivisions set about similar fiscal problems result be paying close attention to what happens in these two California cities. In the process there has been a lot of finger pointing, largely at labor unions, as politicians and city leaders are slow to admit their own roles in the creation of the crisis.Closer scrutiny may suggest that labor unions are less culpable than the politicians are allowing to admit. Purpose and Objectives. The purpose of this study is to explore some of the challenges in pension reform. We will suggest some guidelines for bringing stakeholders together to deal with the problem. Finally, we will suggest a possible solution to the financial crisis faced by states and their political subdivisions stemming from widespread unfunded pension liabilities. Limitations of our Study. We have not gone into excruciating detail regarding San Diegos pension scandals, though it may have been instructive to do so.Neither have we discussed uncounted millions of dollars in wasted lega l fees that stemmed from confrontations that might have been avoided, had the city of San Diego taken a more cooperative approach toward labor. While relevant to the present discussion, these details were a crook beyond the scope of this study. We looked at a thirteen pension plans as a representative sample. Twelve of these were chosen specifically because they were held out as creation exemplary in the late 1990s, to support the idea that public hideaway systems outperform amicable Security.A number of these plans were highlighted in a Pew Institute study suggesting that Social Security should be privatized, rather than run by the federal government. It is noteworthy that, with the exception of just one, all of these non-FICA pension systems are today in serious trouble. Another plan was selected to illustrate just how bad off one State pension system had become, underscoring the magnitude of the nationwide problem. We did not study the intricacies of each plan to discuss why they have together amassed hundreds of one million million millions, or even trillions of dollars in unfunded pension liabilities.We presume the reasons were common among them all, and that they represent the majority of public sector pension plans in trouble today throughout the United States. We also did not go into great detail to examine the single non-FICA plan that has managed to operate for several decades without a dime in unfunded pension liabilities. The Galveston County alternative to Social Security plan is quite unique among public sector pension systems, with plainly two neighboring Texas counties following its lead. The plan deserves further study, but this is beyond the scope of our presentation.Even if its adoption were to become widely accepted in the future, however, it would not address current issues faced by the nations other public sector retirement systems. Additionally, this study does not attempt to examine the legislative steps that may be involved in making any solution work. The U. S. Supreme Court has had little to say on the subject of modern pension reform, but we can expect that to change in the near future as current challenges to State and local pension reforms make their way through the court system.Stay tuned, as it is slayly a matter of time before the nations highest court will have an opportunity to weigh in on the topic. Summary of Remaining Chapters. In Chapter I we have introduced the concept of pensions, and their place in society as something to which workers are entitled. We have historied that in todays tight fiscal environment, State and local governments have become challenged to continue providing pensions. Chapter II discusses the widespread nature of the problems leading to the call for pension reform nationally. In Chapter III we put Social Security in perspective.Chapter IV touches upon some of the proposals put forth in the political processes of 2012. Chapter V notes that there are legal and even c onstitutional implications standing in the way of draconian pension reforms. In Chapter VI we discuss bringing unions on board to seek solutions in cooperation with management, rather than go on in a pattern of confrontation. Chapter VII discusses one creative way to handle widespread unfunded pension liabilities, and suggests a way to make it work for the benefit of everyone involved. Chapter VIII closes by offering our conclusions and recommendations. Chapter II Pensions in PerilThere has been much talk in recent months concerning pension reform. At issue is the fact that define benefit pension plans are unfunded to an alarming degree. This is true nationwide. State and municipal pension funds in many state and local governments soon have less than half of the assets needed to meet their obligations to current and future retirees. The Stanford Institute for stinting Policy Research conducted extensive research on California public pension systems, releasing its report in Februa ry, 2012. They analyzed the 24 of the largest public pension systems in 20 California municipalities.While most pension systems nationally release financial reports assuming long term investment returns of near 8%, the Stanford study employ a more conservative deem of 5%. Authors of the Stanford study, Evan Storms and Joe Nation, PhD. , make the alarming finding that these 24 systems, in sum of money, are only 53. 6% funded. To illustrate the issue, as of 2010, the San Diego urban center Employees retreat System (SDCERS) had accrued liabilities of $9. 871 billion. This estimate is based upon Stanfords assumed discount rate of 5%, a more conservative estimate than the 7. 75% used in SDCERS official projections.The higher(prenominal) the assumed rate of investment return, the lower the liabilities appear. Sugarcoating the issue by making unrealistic assumptions may ultimately make the matter worse. This is money infallible to meet the obligations due current retirees, as well as to meet vested benefits already earned by current employees. To meet this nearly $10 billion obligation, SDCERS has assets only approaching $4. 4 billion. This represents a livelihood ratio of only about 44. 4% of the amount needed to fulfill the citys promises to its employees. According to Stanfords research, the city of San Diegos 2010 unfunded liability was $5. 489 billion. Storms & Nation, p. 38) The County of San Diego was similarly situated, with assets of nearly $8. 2 billion to meet accrued liabilities of $15. 693 billion, a shortfall of nearly $7. 5 billion. (Storms & Nation, p. 28) The City and County of San Diego are by no means unique in the state. The four pension plans for the City and County of Los Angeles have assets totaling near $70 billion and accrued liabilities of over $90 billion, a $20 billion shortfall. (Storms, pp. 19 and 23) The City and County of San Francisco has assets of close to $16 billion against liabilities of well over $26 billion, or a bit ov er $10. billion in unfunded liabilities. (Storms & Nation, p. 22) The Stanford study included the 24 largest county and municipal pension systems in the State of California and reveals a total aggregate unfunded liability of $135. 7 billion. This represents almost 46. 4% of the total accrued liabilities of these 24 city and county pension systems. (Storms& Nation, p. vii) The Stanford study examined 2010 results, and suggested that long term investment assumptions in excess of 5% should not be relied upon.On July 21, 2011, the San Diego County Employees Retirement Association (SDCERA) announced preliminary investment results for fiscal year 2011. SDCERA had managed an outstanding 21% gain. This amazing return added $1. 6 billion to the SDCERA pension fund. Surely the SDCERA Board should be commended on such outstanding results. A few such years can do wonders in restoring this particular fund to health. But just as surely, such results cannot be expected to continue each and every year. Neither can other funds rely upon such results. Indeed, few have ever done so well.In 2012 the SDCERA fund realized investment income at the rate of only 6. 5%. While most State retirement systems have report billions of dollars in unfunded liabilities, Illinois may be the poster child of sickly State sponsored pensions. As of 2011, the 5 Illinois State pension plans report championship ratios of only 43%, with a total unfunded pension liability of $83 billion. The shortfall in 1996 was only $20 Billion. In the intervening 15 years the unfunded liability multiplied 4 times, from 20 Billion to over $83 Billion, well over $4 billion each year, on average. The nearly $64 billion question How did this happen?This question was studied recently by the civic delegation of the Commercial Club of cabbage. Investment losses, resulting mainly from the mortgage crisis starting in 2007, are estimated by the Committee report to account for nearly 22% of the shortfall. (Civic Committee, p . 11) Investment returns play the major role in pension fund growth, but they are unpredictable, as illustrated in the following chart, taken from the Civic Committee of the Commercial Club of Chicago report on the Illinois State Retirement System Another major impact comes from changes in actuarial assumptions, due to an return in mortality rates.This phenomenon may be good for life insurance companies, paying less in death benefits, but defined benefit pension annuities cost more to fund when people are expected to make up longer, since retirees will collect their pensions for longer periods of time. The reduces for Disease Control and Prevention recently inform that, In the most recent period from 1969 to 2010, significant progress in the foilion, diagnosis, and treatment of cardiovascular diseases likely contributed to the 41 per centum decline in age-adjusted mortality. (Hoyert) The carry in mortality rates has been quite dramatic. For all but the oldest age group (85 years and over), mortality risk fell more than 50 percent between 1935 and 2010. . . For persons 6574 years of age, death rates declined by 62 percent, while death rates decreased by 58 percent for those 7584 years of age, and declined 38 percent for persons 85 years or more. (ibid. ) Applying these statistics to pension plans, particularly defined benefit plans with cost of living adjustments (COLAs), it only stands to reason that the costs to keep the retirement checks flowing to retirees who are living longer, will have a major impact on pension funds.According to the Chicago study, in 1970 a 60 year old was expected to live to the age of 78. By 2007, however, a 60 year old was expected to live to the age of 82. 5. Paying benefits to a 60 year old retiree receiving a pension of $50,000 per year, therefore, has thus increased by over $225,000, estimating that he will be receiving that benefit for about 4. 5 years longer than might have been the case 40 years ago. Such variances, multiplied across the hundreds of thousands of articipants in the state pension plans and without corresponding increases in employee contributions, can have a significant impact on the plans unfunded liabilities. (Civic Committee, p. 14) The alike(p) phenomenon can be applied to other pension plans throughout the United States. Couple amendd mortality factors with reduced investment earnings, and catastrophic losses resulting from the Great Recession. Add to this the fact that states and municipalities are also suffering from dramatic the tax revenue reductions. It quickly becomes evident that pensions are in peril.The Civic Committee report states that, If Illinois fails to address its pension system through a set of comprehensive and lasting reforms, all of its citizens will ultimately suffer. Participants in the underfunded pension plans will be put at risk. The states ability to provide vital public services will be severely hampered. And a growing financial burden will be imposed on Illinois residents. (Civic Committee, p. 1) Official reports from pension funds throughout the country estimate unfunded liabilities totaling close to a trillion dollars as of mid-2011.That figure, however, is based upon future average investment earnings at the rate of approximately 8%. While there have been years in which pension systems have deliver the goods such a return, or even greater, to rely upon such returns long term, in todays tight economy, may seem unrealistic. Accordingly, such an assumption grossly understates the magnitude of the problem. In July of 2010 the National Center for Policy Analysis estimated unfunded public pension liabilities throughout the United States in excess of 3. 1 trillion dollars. Collins & Rettenmaier) Even this estimate may be optimistic. In July of 2012, Andrew Biggs, Ph. D. , a scholar with the American Enterprise Institute in Washington, D. C. , released a report suggesting a more accurate calculation for public sector unfund ed pension liability may be closer to $4. 6 trillion. (See Table 1) The wide differences among these estimates are accounted for by investment returns, or discount rates, that are more or less optimistic. Andrew Biggs understands pension accounting. He was formerly Principal Deputy Commissioner of the Social Security Administration.Dr. Biggs holds Masters degrees from Cambridge University and the University of London, along with a Ph. D. from the London check of Economics. (Biggs) Whether the actual number is 1 or 5 trillion, either number represents a manifestly insurmountable crisis for public pensions in the U. S. Faced with such a situation, governors, county administrators, mayors, and city councils throughout the nation are want creative solutions to handle their part of the shortfall. The urgent call for pension reform has reached crisis proportions in many State and local governments.During the presidential primary pick in June of 2012, the cities of San Diego and San J ose, California, introduced right to vote measures seeking voter assurance to reform the pension plans of their respective municipal employees. In both cities the ballot measures were passed by an overwhelming majority of voters, though one might wonder whether the voters were in full informed. On June 22, 2012, San Jose Mayor Chuck Reed hand delivered a letter to the U. S. Treasury Department summarizing his Citys fiscal problems as follows San Joses cost for retirement benefits has gone from $73 million ten years ago to $245 million this year.To cope with this increase, we have reduced our work force from 7400 to 5400 employees. We also made many organizational changes to be more efficient, and every employee in the city took a 10% cut in pay. Yet, our unfunded liabilities for retirement benefits continue to grow, and we are facing rising costs for at least another decade. Short of bankruptcy, we have a very limited range of steps we can take to control retirement costs. In add ition to layoffs and pay cuts, we can require our employees to pay more for the cost of their benefits.Hundreds of cities in California and in other states have already done so. Starting in June 2013 our employees will have to pay an additional 4% of their pay towards unfunded pension liabilities. That amount will increase yearlyly until it reaches 16% of pay or 50% of the cost of unfunded liabilities. San Diego and San Jose barely represent the tip of the iceberg. The problem, as Mayor Reed suggested, is national. Most State and local government pension programs today sense the need for some form of pension reform. Some have been quick to blame the problem on the greed of labor unions.Labor unions have a responsibility to represent their members, and to bargain for the best possible terms and conditions of employment, including pensions. But the unions are not the ones who write the checks or manage public pension funds. Labor unions do not choose to take pension contribution holi days. The most highly compensated public employees, those taking the largest pensions, are often not be by unions. So while unions make wonderful scapegoats, the most grievous of pension abuses that have brought public sector pensions to the wand of insolvency may not lie with unions or their members.Assigning blame to either faction does little to address the problem, and it is not at bottom the scope of this report to point fingers at anyone. Rather we hope to point the way toward a workable solution. Before looking at proposed or potential solutions we should first understand the role of Social Security. While many public sector employees are not covered under Social Security, nevertheless, by law their public retirement systems are required to provide benefits that are at least like to those provided by Social Security. Chapter III Social SecurityNo discussion of pension reform can be complete without an understanding of Social Security, the backside of pension protection f or the vast majority of American workers, though certainly not all. On August 14, 1935, Congress passed H. R. 7260, which came to be known as the Social Security Act, signed into law by President Franklin Delano Roosevelt. The intent was to provide a level of economic security in the wake of the Great Depression, providing protection for workers and their dependents against the loss of earnings due to disability, retirement, or death.The preamble of the Social Security Act describes it as, An act to provide for the general public assistance by establishing a system of Federal old-age benefits, and by enabling the several States to make more fitted provision for aged persons, blind persons, dependent and gritty children, maternal and child welfare, public health, and the administration of their unemployment compensation laws to establish a Social Security Board to raise revenue and for other purposes. When first introduced, Social Security covered most private-sector workers. Excl uded from coverage, however, were state and local government employees. Prior to 1951, State and political subdivision government employers were not required to participate in Social Security, due to concerns over the constitutionality of imposing federal taxes upon sovereign state governments. The Social Security Act was amended in 1950 to add Section 218.This amendment let voluntary State participation through Section 218 Agreements, so named after Section 218 of the Social Security Act The Commissioner of Social Security shall, at the ask of any State, enter into an agreement with such State for the purpose of extending the insurance system established by this title to services performed by individuals as employees of such State or any political subdivision thereof. 42 U. S. C. 418 (a)(1) Prior to 1983, continued participation under Section 218 Agreements was optional, with States having the right to withdraw from those agreements.Beginning in 1983, however, those public employ ers which were act in Social Security were required to continue that participation. The city of San Diego was among many local governments that opted out of Social Security in 1982, prior to the effective date of that change in the law. Throughout the United States today there are approximately 86,000 public employers, with 23 million public employees, according to the Social Security Administrations State and Local Government Employers Information webpage.Approximately 5 million of those government employees work for public entities that do not participate in Social Security, but rather provide coverage under public retirement systems meeting stringent impregnable harbor requirements. Under current law, Social Security coverage is extended to include employees of state and political subdivisions, unless they are covered under a retirement system that provides benefits that are comparable to those acquirable under Social Security.The safe harbor requirements are spelled out in Ti tle 26 of the Code of Federal Regulations, otherwise known as the ingrained Revenue Code Under section 3121(b)(7)(F), locks of an employee of a State or local government are generally subject to tax under FlCA after July 1, 1991, unless the employee is a member of a retirement system maintained by the State or local government entity. This section 31. 3121(b)(7)2 provides rules for ascertain whether an employee is a member of a retirement system.These rules generally treat an employee as a member of a retirement system if he or she participates in a system that provides retirement benefits, and has an accrued benefit or receives an allocation under the system that is comparable to the benefits he or she would have or receive under Social Security. In the case of part-time, seasonal and temporary employees, this minimum retirement benefit is required to be nonforfeitable.In simple terms this means that public employers who do not already voluntarily participate in Social Security under a Section 218 agreement, must now do so unless they provide benefits under a public retirement system which are at least as comprehensive and beneficial as those provided under Social Security. This is not a discretionary item, where a public employer may give its employees an option to participate or not. The employer must either participate in Social Security, or provide its employees with a retirement system that provides benefits which are comparable to the benefits he or she would have or receive under Social Security. Another consideration is that Social Security OASDI benefits include a great deal more than a simple retirement plan paying retirement income to its participants. Social Security also offers income to a workers dependent children until their age 18. There is also a disability income insurance element within Social Security, which is either non-existent or difficult to provide under a typical 401(k) style plan. 401(k) plans are investment vehicles that requi re the element of time in order to grow. Disability can strike at any time, and may not wait for a workers 401(k) plan to gain adequate resources.Disability income insurance costs are occupationally based. The greater the physical demand upon the worker, and the more hazardous an occupation is, the greater the cost to provide insurance coverage. Sanitation workers and gum elastic employees, police officers and firefighters, for example, face physical demands and hazards that do not exist for clerical workers and executive level department heads. To replace the disability benefits guaranteed under Social Security through a plan of insurance, whether self-funded or through commercial insurers, would add a tremendous drain upon the resources of a be Contribution plan.In contrast, Social Security spreads that risk across all workers nationally, regardless of occupational hazards. In the private sector nearly all employees are subject to payment of Social Security payroll taxes under t he Federal Insurance Contributions Act (FICA), and eligible for coverage under Social Securitys Old-Age, Survivors, and Disability Insurance (OASDI). But approximately 5 million public employees in the United States are unloose from Social Security coverage, since their employers opted out of Social Security before 1983.As discussed above, Public employees may be exempted from Social Security, provided they are members of a retirement system maintained by a state or political subdivision. To be exempt from Social Security coverage, the retirement system must provide certain minimum retirement benefits. To meet the minimum requirement, IRS regulations require that a retirement system provide benefits to the employee that are comparable to those provided in the Old-Age portion of the OldAge, Survivor, Disability Insurance (OASDI) program under Social Security. IRS Publication 963) Public employees who participate in a retirement system that meets the minimum requirements are said to have safe harbor. Such a retirement plan may be either a defined benefit or a defined contribution plan, but benefits derived from the plan must be comparable to those available under Social Security. In other words, any public pension plan that fails to provide retirement and disability benefits at least as good as those provided under OASDI, also fails to exempt the pubic employer from participating in Social Security.Drastic changes to public retirement systems may disqualify municipalities from continued safe harbor. Another consideration those anxious for reform may be overlooking is that this is an all-or-nothing proposition. Cities imposing major pension reforms limited to new hires may find that the new employee plan fails the safe harbor test, thus requiring Social Security participation from all employees, including those not previously covered. While this remains to be tested in the courts, the law seems pretty clear on this issue. Social Security has had its detractors f rom its very beginnings.Many people have believed private investment strategies could produce greater financial security than the government run Social Security program. Some have called for Social Security Privatization. In 1997, William Even and David MacPherson published a study that examined 7 public retirement systems not participating in Social Security, referred to as non-FICA plans. The study suggested that these 7 plans would provide greater retirement benefits than Social Security to the million covered employees. (Even MacPherson) In 1999, the Cato Institute published the Cato Project on Social Security Privatization.This study examined several other non-FICA public retirement systems administered by local governments, including the San Diego City Employees Retirement System (SDCERS), the Massachusetts Teachers Retirement System, the lah Police Retirement System, the Louisiana Firefighters Retirement System, the Public Employees Retirement System of Ohio, the Alternativ e Plan for Galveston County Employees. (Lips) At the time of these studies, each of the dozen retirement systems have in were thriving, and reportedly capable of providing far greater benefits to their beneficiaries than would have been available under Social Security.They were spotlighted to illustrate that such funds were outperforming Social Security as a means of providing retirement security for public employees. In Chapter II we mentioned that as of 2011, according to a report published by the Stanford Institute for Economic Policy Research, the San Diego City Employees Retirement System (SDCERS) only had assets of $4. 4 billion to cover accrued liabilities of $9. 871 billion, an unfunded liability of $5. 489 billion. Due to differences in projected investment returns, these figures differ dramatically from the official numbers released in SDCERS financial reports.SDCERS reports their unfunded liability at under $2. 2 billion. Either way you slice it, whether $2 billion or $5 billion, this is a great deal of money for any single municipality to come up with. Whichever figure you prefer to accept, the fund is no longer the healthy pension system it was at the time of the 1999 Cato study. The SDCERS fund was then considered among the best public employee retirement systems in the country, an example used to hike up the idea of Social Security privatization. Today it has an unfunded pension liability approaching 56%. Select Unfunded Accrued Pension Liabilities Non-FICA Public Retirement System UAL (billions) Funded Ratio % 1 San Diego City Employees Retirement System (SDCERS) 2. 1 68. 5 2 Los Angeles City Employees Retirement System (LACERS) 3. 7 72. 4 3 Maine Public Employees Retirement System (Maine PERS) 4. 1 66. 0 4 Ohio Public Employees Retirement System (OPERS) 67. 8 63. 0 5 State Teachers Retirement System of Ohio (STRS Ohio) 40. 6 58. 8 6 Colorado Public Employees Retirement System (PERA) 30. 0 7 Nevada Public Employees Retirement System (NVPERS) 10. 9 70. 2 8 California State Teachers Retirement System (CalSTRS) 65. 69. 4 9 Massachusetts Teachers Retirement System 13. 6 58. 7 10 Louisiana Police Retirement System 0. 3 55. 6 11 Louisiana Firefighters Retirement System 0. 4 74. 3 12 The Alternative Plan for Galveston County Employees 0. 0 100. 0 239. 0 With the exception of one, each of the other public retirement systems cited in the 1997 and 1999 studies are today facing massive unfunded liabilities. Based on their own 2010 or 2011 financial reports, 10 of those 11 retirement systems are facing total unfunded accrued actuarial liabilities (UAL) of $239. 0 billion. 1.As of June 30, 2011 the unfunded actuarial liability (UAL) of the San Diego City Employees Retirement System (SDCERS) was 2. 1778 billion, a accompaniment ratio of 68. 5%. Those are SDCERS own estimates. As shown above, however, reducing the assumed investment income rate to 5% changes the funding ratio to 44% and suggests an unfunded liability of between $5 and $6 billion. 2. The Los Angeles City Employees Retirement System (LACERS), administers pensions for employees of the City of Los Angeles, a city with an annual figure of near $7 billion. As of April, 2012, the fund reported $27 billion in unfunded pension liabilities. source http//www. calwatchdog. com/2012/04/30/los-angeles-teeters-on-the-brink-of-bankruptcy/ 3. As of May 24, 2011, the Maine Public Employees Retirement System (MainePERS) reports an unfunded accumulated liability (UAL) of $4. 1 billion in the MainePERS State/Teacher Plan, amortized at a 2-year cost of $689 million on top of normal contributions of $159 million. as reported by letter to Senator Richard Rosen and Representative Patrick Flood of Maines Joint Standing Committee on Appropriations and Financial Affairs, May 24, 2011 4.As of April 2, 2011, the Ohio Public Employees Retirement System (OPERS), with its 5 pension plans, including the Highway Patrol Retirement System, the Ohio Police and Fire Pension F und, the Ohio Public Employees Retirement System, the State Teachers Retirement System, and the School Employees Retirement System, has a total unfunded pension liability of $67. 8 billion, against assets of $115. 5 billion. That makes Ohios pensions only 63% funded. source http//sunshinereview. org/index. php/Ohio_public_pensions 5. The State Teachers Retirement System of Ohio (STRS Ohio) reported an unfunded liability of 40. 5 billion, as of November 10, 2011. https//www. strsoh. org/ On September 26, 2012 Ohio Governor Kaisich signed the Ohio pension reform bill passed by the Ohio Legilature on September 12, intending to improve the financial condition of its five Ohio pension systems. The bill continues to support Ohios specify Benefit Pensions as major economic drivers for the state, and providing a stable retirement income for public workers in Ohio. https//www. strsoh. org/legislation/main. html At Ohio State University, faculty contribute 10% of their salary to the retirem ent plan, while the university contributes 10. % of the faculty members salary to his or her retirement plan. An additional 3. 5% of salary is contributed to STRS to reduce unfunded liabilities. http//hr. osu. edu/benefits/rb_strs. aspx 6. The Colorado Public Employees Retirement System (PERA) faced a 30 billion unfunded liability in 2010. 7. The Nevada Public Employees Retirement System (NVPERS) has assets of $25. 8 billion, and has generated a net return of 9. 3% over its 28 year existence, exceeding its actuarial objective of 8%. That sounds great, until you realize that returns over the past 5 years average closer to 2. %. The Nevada PERS estimates its funded ratio at 70. 2% for 2011, its lowest level since its 1992 inception. This leaves the plan with an unfunded liability of 10. 95 billion. 8. California State Teachers Retirement System (CalSTRS), 152. 2 billion in assets, as of June 30, 2011, had an unfunded liability of $65. 5 billion, representing a funding ration of 69. 4% . source Pensions Investments Research Center, April 9, 2012, available at http//www. pionline. com/article/20120409/REG/120409899 9. The Massachusetts Teachers Retirement System has one of the lowest cost o taxpayers, with employees required to fund the greatest portion of their own retirement. New employees pay 95% of the cost of their pensions. But the system still faces an unfunded pension liability of $13. 6 billion against assets of 19. 4 billion, in 2009, with a funded ratio of just 58. 7%. 10. The Louisiana Police Retirement System is a small system with assets of only $360. 9 million, but its unfunded liability is $313 million. Its funded ratio is only 55. 6%. 11. The Louisiana Firefighters Retirement System, as of June 30, 2011, had an unfunded actuarial accrued liability of $416,177,743, against assets of 1. billion. This fund has a funded ratio of 74. 33%, which is very good compared to the rest of Louisianas retirement systems, facing a total shortage of 18. 5 billion, with a funding ratio of 56%. 12. The Alternative Plan for Galveston County Employees is unique among the reviewed plans, claiming no unfunded pension liability. This plan was patterned after Social Security, calling for the same level of contribution as with Social Security, from the employer and the worker alike. The plan also incorporates an insurance element that improves on the theme from Social Security.In addition to retirement benefits that a near double those of Social Security, Galvestons Alternative Plan pays a death benefit equivalent to four times a workers annual salary. Two neighboring Texas counties adopted similar retirement plans in 1983. The Galveston model stands alone among all of the public retirement systems included in the 1997 and 1999 studies used to support the idea of privatizing Social Security. Galveston Countys approach seems worthy of further study and emulation, as a plan fair to participants, employers, and taxpayers alike.Chapter IV Reform Proposit ions In the past dozen years, since the disaster of 9/11/2001, and especially since the mortgage industry meltdown in 2008 and 2009, pension reform has become an increasingly pressing issue. Some municipalities, including San Diego, and San Jose, California, have passed ballot measures calling for pension reform. These were known as Proposition B in San Diego, and Measure B in San Jose. San Diego and San Jose are the 8th and tenth largest cities in the U. S. respectively, so what happens in these communities with respect o pension reform will gain the attention of all cities throughout the nation that are seeking solutions to the problem of unfunded pension liabilities. San Diegos City Charter included a provision that requires a majority vote of all city employees to approve any changes to retirement benefits. Proposition B called for that provision to be eliminated from the City Charter. (Prop. B) The ballot measure was intended to create a voter-supported mandate, granting the Ma yor and the City Council authority to characterize the Citys pension plans. These make up a major part of the compensation packages of city government workers.If the City denies its employees voting rights over control of their pensions, such a move could have serious property right implications. Implementation of such a plan may lead to very costly legal battles for reasons we have explored in previous chapters. Among the most fundamental of employee benefits upon which the vast majority of U. S. workers have come to rely is the Social Security system, which we discussed in Chapter III. Social Security ensures a degree of financial stability to retired workers, or in the event of a disabling injury or disease that would prevent a worker from earning a living.This basic employee benefit has been a part of American workers life since passage of the Social Security Act of 1935. The act instituted a system of mandatory old-age insurance, issuing benefits in proportion to the previous earnings . . . and establishing a reserve fund financed through the imposition of payroll taxes on employers and employees. (Farlex) But what many voters may not have realized when they supported Proposition B in June of 2012, is that participation in Social Security is among the sacrifices San Diego employees made in accepting careers with the City.As explained in Chapter III, while virtually all private sector employers are required by law to participate in Social Security for the benefit of their employees, only some local government entities are exempt. The City of San Diego elected to withdraw from Social Security participation in 1982, and since then has not paid Social Security payroll taxes. Instead, San Diego and many similarly situated municipalities provide retirement and disability related financial security to its employees through the Citys pension plan.San Diego City employees are only eligible to receive Social Security retirement benefits if they worked in covered employment other than for the City of San Diego, or worked for the City prior to 1982. Instead, San Diegos employees are covered only by the public retirement system provided by the City. Public employees in many other cities across the nation work under similar circumstances. But since the vast majority of voters are covered by Social Security, it likely does not occur to them that local government workers are not eligible.While pension reform became a political football in San Diegos 2012 mayoral campaign, pension issues have plagued the City of San Diego for over a dozen years. One of the four mayoral candidates, City Councilmember Carl DeMaio, wrote and promoted Proposition B, which was placed on the ballot for the presidential primary election held on June 5, 2012. Much controversy surrounded this ballot measure, following allegations that the City had circumvented the legally required process of meeting and conferring with its labor unions.Both outgoing Mayor Jerry Sanders an d City Councilmember Carl DeMaio openly claimed authorship of the ballot initiative. Mr. DeMaio made it a key element of his mayoral campaign. But when the City was challenged as to its failure to negotiate with the Citys union concerning proposed reforms, they both claimed the initiative was citizen-initiated, and not an action of the City. Since both the mayor and a prominent member of the City Council each played a major role in the authorship and promotion of the initiative, it seems difficult to legitimize the claim that this was not an official action of the City.As the ballot measure was presented to the voters, however, supporters of the initiative failed to mention or remind voters that San Diegos pension plan had replaced Social Security for City employees 30 years before. Had voters understood the full ramifications to City workers, and the fact that they are not covered by Social Security, the election results on Proposition B may have been different. Indeed, had the vot ers who signed petitions to have the measure placed on the ballot known this vital detail, some may have withheld their signature.Promoters carefully avoided any discussion of Social Security as they cajoled voters to pass the measure, while opponents also failed to adequately stress the Social Security implications. Legal challenges were brought in the courts, charging that the City violated its legal obligation under the Meyers-Milias-Brown Act to meet and confer with the Citys unions regarding provisions of the ballot initiative. The City won the first round in this battle, succeeding in getting the measure placed on the June 2012 ballot. In San Diego municipal Employees Association v.The Superior Court of San Diego County (San Diego County Superior Court No. 37-2012-00092205-CU-MC-CTL), the Court of Appeal for the Fourth Appellate District overruled that decision, but too late to have any impact. That decision came on June 19, 2012, two weeks after the election. The suggestion t hat San Diegos Proposition B had a questionable legislative history, or that it was improperly brought to a public vote, is not to imply that pension reform is unnecessary, in San Diego or anywhere else. But Proposition B may not be the panacea San Diego voters were led to expect.There may be other actions San Diego can take to address its pension problems actions that would be both more effective and more fair to City employees and taxpayers alike. Several such potentially more sensible approaches to the problem were mentioned by Congressman dockage Filner, the only one among San Diegos four mayoral candidates who resisted Proposition B. Congressman Filner recognized the propositions shaky legal foundation, and acknowledged that such a reform plan may meet with constitutional challenges we will explore in the next chapter.Proposition B involved several elements. One part of Proposition B imposes a wage freeze. Curiously, however, even after the wage freeze was announced, Mayor S anders authorized pay raises for several members of his administration, totaling nearly $45,000 per year. Union officials might wonder why austerity measures like wage freezes apply to represented employees, but apparently not to another class of employees. If serious belt-tightening is called for, the City might do well to apply such measures universally.To expect the burden to be borne by the Citys unionized workers, but not by management employees, does not do much to promote labor peace. The proposition also modifies the police pension plan, raising the retirement age and lower the maximum benefit. Pension benefits for newly hired public safety workers would be reduced from a maximum of 90% to a lower cap of 80% of pre-retirement earnings. Key among the changes imposed by Proposition B is replacing the Citys outlined Benefit pension plan with a 401(k) style delimit Contribution plan that make no financial security guarantees.These would be for all new employees who are not a pa rt of the Police Department. As to Social Security, close reading of Proposition B reveals that its author acknowledges the fact that City employees are not presently covered. It is suggested that the City may open the option for employees to become covered by Social Security, but that it is the intention of the City to maintain its safe harbor exemption from Social Security participation. In this respect San Diegos Proposition B approach to pension reform may have a fatal flaw.Recall from our discussion of Social Security that municipalities can maintain exemption from participation in Social Security, but only if its pension plan provides benefits comparable to those available under Social Security. For the past 30 years the Citys Defined Benefit pension plan has fulfilled that requirement. The question is, will the 401 (k) style Defined Contribution plan proposed under Proposition B, meet the same stringent requirements? Unless the plan provides a level of benefits at least as co mprehensive as Social Securitys Old-Age, Survivors, and Disability Insurance (OASDI), the answer is likely no.Defined Benefit Pension plans base pension benefits as a guaranteed fixed percentage of pre-retirement income, determined by a benefit formula that considers both rates of pay and years of service. These benefits are paid for by employer and employee contributions to the pension fund, and also by the investment income derived from the fund. When fund investments do well, contributions required from the employer are lessened. When investment income suffers, greater contributions are required from the employer to meet fund obligations.Defined Contribution Plans, in contrast, do not feature benefit guarantees, but rather base their security in a known fixed cost for the amounts paid into the plan. (Bennett-Alexander, p. 774) Defined Contribution plans may seem benignant from the point of view of the employer, but for the worker it means financial uncertainty. Eliminating the f inancial security features of Defined Benefit plans is a major change from long-standing past practice in San Diego and in cities similarly situated.The principle of past practice may give yet another basis upon which unions may mount a challenge to such a drastic change as to eliminate participation in Defined Benefit plans. Defined Benefit Pension Plans account for nearly 73% of union-negotiated retirement plans across the Nation, particularly in the public sector. (Carrell, p. 329) Income maintenance plans pensions and other employee benefits such as falling out pay, death and disability insurance, wage guarantees, supplemental unemployment plans, and the like have generally been negotiated over long periods of collective bargaining by employee organizations and unions. Carrell, p. 328). In many cases, such as for San Diego city employees, these negotiated income maintenance plans take the place of programs made available to other workers through Social Security. Based upon on es term of employment and level of earnings, Social Securitys OASDI provides guaranteed disability and retirement income to covered individuals and their families. Defined Benefit pension plans can be designed to be as good or better than Social Security. Benefits under Social Security are not in any way dependent upon investment returns, and the same is true, by definition, in Defined Benefit pension plans.The very nature of a Defined Benefit plan is that what is defined is the benefit, not the contribution. Benefits are established, and contributions may vary to meet the scheduled benefits. If investment returns fail to fund the plan at sufficient levels to meet plan obligations, the shortfall is simply overcome by making greater contributions to the plan. In a Defined Contribution plan, however, what is guaranteed is not the benefit, but rather the amounts to be contributed. Costs are fixed benefits are point upon the funds resources, which come both from contributions and inves tment earnings.Simply put, benefits are directly dependent upon investment returns, which cannot be guaranteed. Highly compensated employees (HCE) see another attractive feature of 401(k) style retirement plans. Participating in such a plan offers very significant tax benefit, allowing voluntary contributions to accrue free of income taxes. Those workers whose income is lower, however, can neither afford voluntary reductions in pay, nor benefit to the same degree from 401(k) plan participation.From the perspective of lower paid workers, particularly those younger workers who do not sense retirement planning as being pertinent, every dollar an employer pays into a pension plan is a dollar that is not available in this weeks paycheck. While equally true for the highly compensated, that dollar has less significance. As explained in a recent study by the Center for Retirement Research at Boston College, high income workers benefit disproportionately due to higher participation rates, hi gher contribution rates, and higher tax benefits. Toder and Smith, p. 7) Defined Contribution plans may appear attractive to public employer budget analysts and some highly compensated employees, but they almost certainly fall short of being comparable to Social Security. To make them comparable, contribution rates would likely have to be set so high as to make investment returns unimportant. utterly then, Defined Contribution plans lose their attraction, as they may cost even more than the Defined Benefit plans they are intended to replace.That may be even more true considering the attorney and court fees taxpayers may be required to suffer to defend legal and constitutional challenges. During the San Diego mayoral race, candidate Congressman Bob Filner, noted that should Proposition B be implemented, there is a strong likelihood that much of the perceived savings might be spent kinda on legal fees defending the lawsuits that would likely follow. Discussing the pension reform pro blem on the National scene, and the move toward cutting back on pension benefits, Stuart Buck, J. D. as noted, The problem is how to do this in a way that is most fair to workers and in a way that is consistent with state or federal Constitutional provisions that prohibit states from impairing the obligations of contracts. (Buck. ) Chapter V Legal and Constitutional Hurdles Power to grant pensions is not controverted, nor can it well be, as it was exercised by the States and by the Continental Congress during the war of the Revolution and the exercise of the power is coeval with the organization of the government under the present Constitution, and has been continued without interruption or question to the present time.Justice Nathan Clifford United States Supreme Court United States v. Hall 98 U. S. 343 (1879) The establishment of pensions in recognition of public service is a practice so steeped in tradition as to be considered a right of passage. Any proposal that suggests takin g such benefits away from public servants will be met with stern opposition in the courts. There are well-founded statutory, contractual, and constitutional protections that make it difficult for cities or other political subdivisions to impose pension reforms. The U. S.Constitution has several clauses that can be interpreted to protect pensions. Numerous State constitutions offer similar protections. San Diego Pension Issues The City of San Diego, California, presents an interesting backdrop for the discussion of the legal and constitutional implications of pension reform. During the past decade the City of San Diego incurred millions of dollars in legal expenses dealing with lawsuits stemming from scandalous pension dealings and futile attempts to make unilateral changes to its pension plans.Such money enriched a few lawyers, but only worked against the interests of the City and its taxpayers. Attempts by the City of San Diego to impose pension reforms again gained attention durin g the 2012 election year. One of the Citys mayoral candidates, City Councilmember Carl DeMaio, wrote a ballot proposition known as the Comprehensive Pension Reform Initiative, making pension reform the basis of his campaign. Of the four candidates in the 2012 San Diego mayoral race, only Congressman Filner seemed to acknowledge the legal and constitutional issues applicable to pension reform.During the campaign, candidate Bob Filner, a 20 year veteran of the U. S. House of Representatives, predicted that should Mr. DeMaios Proposition B pass voter approval, its implementation would be met by legal and constitutional challenges that may cost the City dearly to defend. Mr. Filner also noted that, Proposition B does nothing to reduce the current pension deficit, it takes retirement security from employees who are not in the Social Security system and it will result in years and years of more political wrangling and litigation over its legality and implementation. (Filner) Specifically , the legal implications of Proposition may involve charges of stop of contract. Under California law, employers enter into an implied and enforceable contract with employees as of the date of hire, with respect to the terms and conditions of employment. Employee benefits, including pensions, that are promised as an inducement to accept em