Posted on 12/03/2016 7:06:36 AM PST by george76
Earlier today the Kersten Institute for Governance and Public Policy highlighted an updated pension study, released by the Stanford Institute for Economic Policy Research, which revealed some fairly startling realities about California's public pension underfunding levels. After averaging $77,700 per household in 2014, the amount of public pension underfunding for the state of California jumped to a staggering $92,748 per household in 2015. But don't worry, we're sure pension managers can grow their way out of the problem...hedge fund returns have been stellar recently, right?
Stanford University’s pension tracker database pegs the market value of California’s total pension debt at $1 trillion or $93,000 per California household in 2015.
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Looking back to 2008, the underfunding levels of California's public pension have skyrocketed 157% on abysmal asset returns and growing liabilities resulting from lower discount rates.
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Perhaps this helps shed some light on why CalPERS is having such a difficult time with what should have been an easy decision to lower their long-term return expectations to 6% from 7.5% (see "CalPERS Weighs Pros/Cons Of Setting Reasonable Return Targets Vs. Maintaining Ponzi Scheme")...$93k per household just seems so much more "manageable" than $150k.
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Of course, at this point the question isn't "if" these ponzi schemes will blow up but rather which one will go first? We have our money on Dallas Police and Fire...
(Excerpt) Read more at zerohedge.com ...
Dallas pensioners just made a run on withdrawls, right? I hear the citizen first responders pension fund is in trouble.
Nothing that a few million more illegals and their anchor babies can’t solve.
So some idiots in California make obscene retirement pension promises they know they can’t keep. So years later the Gov’t comes to MY state, that had no say in the deal, and puts a gun to every head of every taxpayer and says “You have to make good on California’s deal”?
Nope. This is a state matter, not a Federal matter
Here’s a primer. I’m medically retired in the state of california peace officer/fire fighter system. 28 years in CYA institutions. I met my wife in prison, she did 17 years and is a retied parole agent. I also paid into a deferred comp system to supplement my retirement. Most state peace officer don’t get social security, but I had enough quoters and I am receiving social security. My wife does not qualify until I die, she can take widows benefits.
When I retired the formula was 2.5% at age 55. But I had had a heart attack at 52 (in Cal if you are a peace officer heart attacks are presumed by law to be job related) and started retirement then.
When Gay davis was governor (he was a recipient of many bribes from state employee unions and nurses and teachers.) He raised the formula to 3% at 50 with the justification that the funds investments would continue growing at the rate it had grown in the early oughts. Of course that didn’t happen.
There is a whipsawing impact when a department or the state raises benefits say for peace officer. If the CHP gets something, the correctional officer want parity and then LAPD and so forth around the state. That’s what happened to the 3.0 at 50. Most departments not use that formula.
You can go back and criticize the system and rightly so, but it has been known for about 10 years that the amount encumbered will bankrupt the state. BTW the pensions are guaranteed by the state constitution. Swartznegger got beat over the head by the teachers union when he proposed economic austerity and he just have up. Of course Brown hasn’t changed the system. One thing you may not know about Brown is that when he runs he goes after the endorsement of law enforcement and has been successful in those efforts. You can’t change the pension system and et those votes.
It will take courage to do anything reasonable and necessary, but the dems and many republicans, do not want to pick up the hot potato. I will be 70 next month. My hope is if they make changes it will impact current employees or younger retirees. I have lived my life on the basis of this income for the last 18 years and i also work our own business. As long as i can think I will work. So we will survive, but something needs to change and now.
If they can’t function as a state, they need to revert to territory status and a military governor needs to be appointed— and he’ll be appointing the state’s judges until they really for statehood.
Arnold GAVE up
Departments claim they have to match the best benefits because they have to recruit and compete for employees with other departments. Why go to LAPD if the CHP has a better retirement or higher salary? This is the argument management makes to agree to union demands to raise benefits.
But, not to worry, Gov. Moonbeam has averted a strike by California's largest state employee Unions (yes, there's more than one) so look for this problem to disappear. From the headlines.
Depressing.
If any of you LIB cali’s leave...don’t move near me. I really don’t want to hear, see or be near LIB insanity.
Hubby is a Kern County Firefighter....retired. So I know about this stuff too. The main problem was not that they gave safety people 3 at 50, it’s that they gave it to everyone. Even the desk workers get 3 at 50. If they had stopped at the safety people they would’ve been in much better shape. Besides, why does a desk worker need 3 at 50?
Hubby retired at 53 after 33 years because his body was so broke down he could no longer do the job. I don’t think that can be said of someone who works at a desk.
Bad time for Cali to be thumbing its nose at the White House, but if they had any sense, they wouldn’t be in the bind they’re in.
“California Pensions Underfunded By $1 Trillion”
They need to tax the rich more. Tax the wealthy celebrities!
Lest all these people bitching about Trump, this is a perfect example of the incompetence that created him.
Illinois is right behind CA in this area of mismanagement, but there the state constitution has a provision which forbids the reduction of public employee pensions. This was recently reaffirmed by the state supreme court. So, they cannot cut benefits to square the equation, they must raise taxes. They are f-----. As they raise taxes, people who have the discretion to leave (disproportionately high income folks) will do so and the problem falls more onerously on lower income folks. It is a tax death spiral.
I think that the most important aspect of this issue is that federal taxpayers be protected. The burden of fiscal mistakes that happened in a given state as the result of their foolish policies (e.g., CA prison dentist retiring at 55 with $257K pension for life) needs to stay in that state. You broke it, you bought it.
I wasn’t aware of that. At the state level many “desk workers” are represented by CSEA and other unions. I don’t think they got the came. For example an office worker in the YA didn’t get the 3.0
It is guaranteed that eventually there will be mass migrations out of California and Illinois. In order to pay for all this they will take it from taxpayers. Eventually they will get tired of it and leave.
Heh. Ain't 'nuff of 'em dotcom CA billionaires to cover a trillion.
CA is goin' down.
Maybe it was up to each county/city etc. Kern County all employees got 3 at 50. Ridiculous.
https://ballotpedia.org/3%25_at_50_retirement_plan
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