Posted on 04/09/2010 7:11:59 PM PDT by Libloather
State pensions in the red
Underfunded by as much as $500 billion, study says
Tuesday, April 06, 2010
By The Associated Press
SACRAMENTO (AP) - California's public pension funds are underfunded by as much as $500 billion, according to a Stanford University study that was commissioned by Gov. Arnold Schwarzenegger and released Monday.
The shortfall could create major financial crisis for the state. And California is not alone: states around the country are facing massive shortfalls in their pension and retiree health care obligations that academics have estimated surpass $3 trillion.
The estimated California shortfall applies to the retirement systems for its state and local government workers, teachers and University of California employees. Together, they serve about 2.6 million retirees.
"This study reinforces the immediate need to address our staggering pension debt," Schwarzenegger said in a statement. "According to the study, California taxpayers are on the hook for over a half-trillion dollars. That's nearly six times the size of our entire state budget."
Analysts at those retirement funds estimated their unfunded liabilities to be much lower. CalPERS put its unfunded liabilities at $38.6 billion on July 1, 2008, and CalSTRS estimated its own rate at $16.2 billion. The Stanford researchers tallied those unfunded liability figures at $239.7 billion for CalPERS and $156.7 billion for CalSTRS.
The researchers also estimated those figures would be even higher today, because those two funds and the UC retirement fund have lost a combined $109.7 billion since then.
David Crane, an economic adviser to the governor and former CalSTRS board member, explained the difference, saying the state's pension funds have been underreporting the gap between revenue and obligations.
(Excerpt) Read more at maderatribune.com ...
Ponzi schemes, all of them.
Turn out the lights, the party is over.
I fail to see how the administrators can be so incompetent! This is just math right?
Investments are supposed to be relatively conservative. How do they get the income and outgo so mismatched?
Start by reducing their pensions 70 percent.
I think once the death panels are up to speed the could reduce the pensioners to a manageable number post haste
Florida state pension is actually in the black....but the state legislature is raiding it to balance the state budget.
States need to lower pension payments....the biggest problems are not cops and low level workers....its those in the Administrative Management levels who get huge pensions with a few years of work.
You still have to fire a bunch of state employees to fix pensions....and you need to fire the highest paid first....for they are the biggest drag on pensions
I’m sure the truth is somewhere in the middle. This was a study requested by the Gov. I wish the media would question these obvious bias studies. How many times have we read about a study from the Southern Poverty Law Center like it was the word of God.
for some unknown reason you can get retirement pensions for working as little as 10-15 years as a public service employee.
So what people are doing is working the minimum ... then moving on to another government job and doing the same thing. Before long they are collecting 3 or more pensions and are only in their 50’s.
THEN on top of that, they are maximizing how much each of those pays them by working massive overtime in their final year of work before retiring, effective doubling or tripling their salaries when they were actually working.
First of all I think all pensions should be eliminated.. BUT if you just must have them, then you should only qualify for one after working someplace like 30+ years and you should only be allowed to collect ONE.
People ain’t gonna get paid. They might as well accept it. What’s funny in this case is I understand that CA is LEGALLY obligated to fund those pensions. Sucks to be them..... ROFL
(a preview of Socialist Insecurity)
That happens when the people that work at ratings and regulatory agencies sit around surfing the internet all day, and believe whatever lies that are told to them, rather than doing their jobs....
Presumably a higher proportion of the liability is funded than is unfunded.
So what, exactly, is a retired state employee due in California? A million bucks...or so?
Who wrote this deal? California state employees?
Where's the love?
(the above is sarcasm, btw)
Here in Massholechusetts, a person who serves as a town or city councilor for 2 terms can get healthcare for life. Not a bad deal huh? Lifetime insurance for a less than part time job?
Any wonder why the nation is bankrupt?
The private sector cannot support the public sector anymore. Look at NJ - the teacher's unions are hoping Governor Christie dies.
Unions must be destroyed.
It is a case of the California legislatures promising outrageous pensions to government unions (and for themselves), and receiving campaign donations for their war chests. Its been criminal. No watchdog activity. Greedy unions, and Politicians that serve their bellies and not their constituents.
Now its either declare bankruptcy and void the pension contracts (the 'right' thing to do - given the circumstances that have gotten us to this point). Or rob from the tax-payers (via the continual class warfare route -- 'the eviiil rich must pay their Fair Share!!')...
I know what pass the California Assembly Critters want to take... We'll see how it goes...
When corporations do this, corporate executives go to prison for misappropriation of funds. When unions do this, the government takes over the pension fund forcing taxpayers to foot the bill. And when the government does it, they raise taxes on the wealth creators.
I don’t see the problem. Obviously, the taxes of the private sector slaves must be raised in order that their government masters may live out their cushy retirements in lavish comfort. That’s just the way it is.
That’s your politicians for you. I don’t care which party they are; they are crooks. Politicians are politicians because they wouldn’t make it in the real world because they don’t know how to make an honest living.
It gets even funner. Like Social Security most state and federal pensions are inflation adjusted (most private pensions are not). Think about the positive feedback loop this situation is going to set up as we print more money to pay the pensions (you can be sure than they will pass some sort of Fed bailout eventually) and this money further increases inflation.
Those folks who thought they had good private pensions are in for a world of hurt. Anyone not invested in inflation protected investments is also going to feel considerable pain.
Just keep your treasures in heaven, because the treasures here on earth are sure moth eaten, rusted, and robbed by thieves...
Lets see now...How can we break the bad news to you.
These investments are not really investments in the sense that you take something you have and put it to work earning a return for you. The money was never put in the pension fund to begin with. The unions ran a scam to get the employee benefits increased each year by not requiring the Citys, Countys and the State to put the money in every week. So.... having no money in the fund, it earns a net increase of Zero.
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