Posted on 09/04/2010 9:15:19 PM PDT by NormsRevenge
The latest stark confirmation that California’s public employee compensation practices are unsustainable and have been horribly managed came this week with the release of a report that warned the University of California’s retirement system faced a $20 billion shortfall.
The report contained this astounding fact: Employees and UC didn’t pay a penny into the system for a 20-year span that only ended earlier this year. Why? Apparently, because there was a presumption the system was adequately funded. In a recent letter to employees, UC President Mark Yudof blamed this massive oversight on state officials. He said he will work with regents to develop new contribution rules to shore up the system’s funding, and then enter negotiations with labor unions to implement the new approach.
Those negotiations figure to be brutal. UC faculty members already complain their pay has lagged in recent years, and to cover the cost of retirement benefits, the university system and its employees will have to nearly triple the amount they began contributing earlier this year. But Yudof says UC has no choice but to take drastic action.
“If we do nothing, in four years the university will be spending more on retirement programs each year than we do on classroom instruction,” Yudof said in his letter.
Unfortunately, the UC president’s aggressive, constructive attitude is relatively rare among government leaders in California. But whether it’s UC, San Diego County, the city of San Diego or dozens of other local and state government agencies, we need a new way of thinking about public employee retirement benefits.
ALL who mismanaged those pension funds should be prosecuted immediately!
SS is going to change, these insane pensions have to change...
and change has to affect those already raking it in....its too late just to make new employees pay....the retirees out there now have to have some skin in the game...
SS is going to change, these insane pensions have to change...
and change has to affect those already raking it in....its too late just to make new employees pay....the retirees out there now have to have some skin in the game...
oops.....
Freeeeeeking unbelievable.
The CalPers cash cow has dried up —— TFB! When some state employees can retire at over their last annual salary there is something very very wrong. The unions have sunk this state and the very bad economy in California produces no
taxes to the state. The investments by CalPers are in the tank. Calpers bought very large rental and commerical properties which are producing no revenue and are worth nada in the current real estate climate. Yet the clowns that produced this sad state state of affairs continue to be supported by the unions. The union sheeple have to wake up, maybe no retirement checks will awake the union sheeple members.
Here that sound? That’s the sound of your taxes going up to cover this bungling.
So the supposed smartest people in the state in the UC system couldn’t manage their own retirement fund. What does that tell you about their ability to teach the younger generations?
Good grief!
California is hanging on longer than Generalissimo Francisco Franco.
I’ve been reading threads about California’s impending doom for at least five years now.
Will that place just go belly up already?
First, elected officials with an IQ under 85 should be disqualified; their knowledge of math, science, economics and ethics must meet some minimum standard. Failure to do so and catering to the egalitarianism of ignorance is demonstrably catastrophic to hundreds of millions.
A disaster that should happen only once; destroying the well being of all can't possibly be justified by the fiction that there is no practical difference between an ignorant imbecile and a normal person.
Second, retirement benefits must be acuarially sound, and pay-as-you-go, with the permanent proviso that errors due to incompetence or criminal fraud by the administrators (including the legislature) must be cancelled, retroactively. Followed by prosecution for criminal negligence in meeting fiduciary responsibility
It's mindboggling that these obvious necessities need to be debated.
I guarantee these people are among the condescending ruling elites quick to give advice and direction to the working classes.
If this was the private sector, a lot of dirtbags would be off to jail.
Those people are pretty smart, they haven’t paid in a penny but will get their pensions anyway.
Liberals really are pretty smart: they find big groups of people who they can extort, but still re-elect them.
Texas, here I come!
Isn't tripling payments to the government exactly what over 99% of academia calls for every day? They should be ecstatic to finally pay "their fair share"!
- Feliks Dzerzhinsky
(George Leggett, The Cheka: Lenin’s Political Police
[Clarendon Press, 1981], p. 252)
Hoist on their own petard...?
Too bad the Supreme Court ruled that the "honest services" prosecution could only be used for bribery or kickbacks.
Wait, never mind...
Cheers!
Pension funds all over the US, not just California, have been making stupid assumptions about annual returns of their portfolios now for the last decade.
There is a wide-spread assumption (ass, u, me and all that) that equities return 8% *on average* per year, measured over decades.
Well, for the first time since WWII, the past decade has shown NO return on equities. The broad market averages are showing that you’d have been much better off to have been invested in bonds over the last 10 years, with two 50%+ collapses in broad market valuations in the last 10 years. That also hasn’t happened since the Depression.
Yet, with the abundance of this evidence, pension funds continue to assume returns will “average 8% over the long term...”
They’re wrong. They’re not a little bit wrong, they’re wrong of epic proportions, and this is now coming back to bit the taxpayers in their wallets hard and fast in the next two years.
They were in fantasy land where they believed that everything would work out because they wanted it to.
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