Posted on 01/24/2017 7:03:17 AM PST by george76
Public schools around California are bracing for a crisis driven by skyrocketing worker pension costs that are expected to force districts to divert billions of dollars from classrooms into retirement accounts, education officials said.
The depth of the funding gap became clear to district leaders when they returned from the holiday break: What they contribute to the California Public Employees’ Retirement System, known as CalPERS, will likely double within six years, according to state estimates.
CalPERS, a public pension fund with $300 billion in assets that is the country’s largest, manages retirement benefits for 1.8 million current and former city, state and school district employees, though it does not cover teachers, who fall under a different pension system.
School district officials say that unless the situation changes, they will have to make cuts elsewhere, possibly leading to larger class sizes, stagnant worker pay, fewer counselors and librarians, and less art and music in schools. Insolvency and state takeover are not out of the question for some districts.
...
California’s pension problem isn’t new. For years, economists and policymakers have warned that the state’s pension systems won’t have enough money to fulfill promises to millions of current and retired workers. But next year, officials said, rising pension costs will eat up more than a third of proposed increases to the state education budget.
There is a predicted shortfall among all state retirement accounts of at least $230 billion based on what’s owed to current and future retirees
(Excerpt) Read more at sfchronicle.com ...
United Airlines got rid of their pension program.
A wise move. The government needs to get out of the pension business.
As a Californian I can’t help but smile. Trump the deal-maker has just been handed leverage to bring CA to its knees.
Raise taxes on “the rich” and redistribute the wealth to democrat voters/donors pension plan.
As I read this, I’m thinking of a house for sale down the street. It’s on the market because its owners, two retired teachers, decided four homes were a bit too much. After all, they have to keep up with their other homes in Florida, Arkansas and New York. It’s easy to have three very nice homes when your combined teacher pensions are $230,000 per year.
This along with the $1.9 billion dollar oops over at the Medi-Cal department could add up to some problems.
Cops and firefighters, and elected officials, have pensions too. Why the teacher hate?
Cops are known for padding their pensions with OT?
IMO, your hatred is ill placed. Carry on. :)
But no mention of reducing administrative positions or reducing their pay increases.
THe investment funds took a signifiant hit in returns when CalPers withdrew from stocks and funds that were not acceptable for some Social goal reason or tied to countries not in favor with SJW. TAxpayers picked up the bill,again.
Why doesn’t the State and these municipalities just TAX their Highly Coveted Illegal Aliens to cover the shortfall??
According to the Politicians they are the very Life Blood of our economy and our future. Maybe they should start PAYING THEIR FAIR SHARE!
It's not hate, but rather disgust. Educators always bitch about their low pay (working 9 - 10 months a year). I know several retired teacher couples. They all own several rental properties and are collecting over $150K in combined pension. At least cops and firefighters work all year. Cops and firefighters risk their lives. Cops and firefighters are not indoctrinating our youth with leftist ideology.
I have a friend who retired in NJ from teaching. He gets 2200 a month. Hardly an inflated pension for 40 years of teaching. I think Administrators get big bucks but not the teachers.
Maybe this is the reason Cali is trying to secede, they need to print their own funny money to cover their debt with fiat funny-money. However if California tries secession almost al of their companies are chartered in Delaware and Nevada and their biggest customer base is in the rest of the US. California has a pretty sh*tty hand.
California teachers always claim they need more money for the students....what the really always settled for was more money for themselves
Most have already. For example federal government has revamped their pension program so that civil service workers get 1 percent a year so after 20 years you get 20 percent of your pension and that is it. You have to do 50 years to get anything decent. The military is the only decent pension left in America. Congress’ is the best as they get 1.8 percent a year.
Yes. You’re right.
Search * unfunded pension liabilities* for your state. This is a huge problem nation-wide.
By law, a teachers retirement is funded by their after taxes contributions in CT. Then these retirement payouts are taxed again by the state income tax.
State fund administrators are supposed to invest the monies to sustain the system.
In CT: **As of its last biennial actuarial evaluation in 2012, Connecticut had $9.7 billion in assets and $23 billion in liabilities in its State Employees’ Retirement System (SERS), meaning that only 42.3 percent of its obligations were funded, and $13.3 billion, or about 58 percent, were unfunded. While an 80 percent funded ratio (20 percent unfunded) is generally considered healthy, Connecticut is one of nine states, according to CNBC, that have a ratio of less than 60 percent, and among those nine, it is second from the bottom of the list, just behind Illinois.**
Defined ‘benefit’ (Soc. Security, Pensions, etc)
- v -
Defined ‘contribution’ (401K)
Everyone needs to understand the difference.
So does California.
So does the United States.
So does Europe.
Failure to do so will bring sever financial pain and suffering.
“Pretty soon there will be no money for schools just pensions. Schools will close because all school employees will be retired.”
SO TRUE! I live in Ohio. Two of my cousins just retired after teaching for 20+ years with very generous pensions. Even so, they gripe about how much they have to pay for their healthcare after paying very little while working. They have a friend who retired after being a superintendent. Her pension is over $100,000/year! This is why schools are going broke!
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.