Cal Pension Systems are Headed to BK but not due to C-19 Virus?

California Globe ^ | May 11, 2020 | Wayne Lusvardi

[WLusvardi]

Budget crisis could have been avoided if Gov. Newsom had pursued a triage virus health policy instead of marital law and business shutdowns

‘In 1999, most government pension plans were 100% funded. With a 50% increase in liabilities, they instantly became two-thirds funded. And, for the last 20 years they are still two-thirds funded!’ – Sen. John Moorlach

State Senator John Moorlach (R-Costa Mesa) knows a lot about municipal budgeting. While campaigning for Orange County Tax Collector-Treasurer in 1994, he accurately predicted the largest municipal bond loss and bankruptcy in history. Moorlach recently wrote in the Bond Buyer: “Put California Pensions on a Ventilator”, alluding to the use of mechanical ventilators to assist patients with life-threatening coronavirus to breathe.

Moorlach is skeptical that budget reductions, issuing pension bonds that double the true pension costs to taxpayers, huge spikes in sales taxes, increased commercial property taxes by a split-roll property tax or more ballot initiatives will prevent eventual Chapter 9 municipal bankruptcies.

he State Legislative Analyst’s Office, however, forecasts a more modest deficit of $18 to $31 billion through 2022. California has $16 billion in reserves. Thus, it is conceivable California could absorb its losses with reserves and modest budget reductions. But this will do nothing to alleviate the coming shock wave of underfunded pension systems. State and federal elected representatives are seeking a federal bailout for these self-caused budget reductions including its pension systems.

[Graybeard58]

Happy to report that my private employer pension fund is currently funded at 187%

I’ve been enjoying it for almost 21 years.

[stuckincali]

The state employees unions are among the most powerful political forces in the state of CAL. When Gay Davis took office, peace officers and fire fighters got 2.5% of highest year salary at age 50 and 3 at age 55. That’s times the years of employment.

The unions phonied up the projections on the retirement fund investments to show a gain of 7%, however the next year’s gain was under 1%. The state, Davis and the legislature, all bribed by the unions, had already given the PO and FF unions 3.0 at age 50. This was based on the phony projections. Note: when the projections are wrong the retirement formula is not adjusted.

When the state officers get 3.0 at 50, the locals LA, SF SD etc want the same so they can recruit and keep their people. It’s a cycle. So the entire state and locals are in trouble. We have term limits and politicians don’t care what happened in 10 years, they won’t be here.

Arnold and Jerry Brown did nothing for `12 years. And nothing is being done now.

When the benefits and pay go up, the bribes go up because the unions increase their fees to the employee.

Welcome to the corruption cycle of public employment

[stuckincali]

Overtime is granted to the senior employees first and they are the highest paid.

[cherry]

what realistically happens when a state’s pension fund goes belly up?...