California’s pension system is constructed in law and last time this came up someone explained that the employee generally puts up about 30% of their contribution and the state puts up the other 70% of the contribution. And it is all part of the compensation package.
The problem in California is the Legislature has found ways to borrow against the pension fund without calling it borrowing (which would be illegal) so the net result is the fund is grossly underfunded against its future obligations.
The state also seems to have no plan to repay the loans they’ve taken and instead just count them on the books as if the IOUs were cash assets...which a state can get away with since they’re exempt from the laws that make it illegal for anyone else to cook the books like that.
The same practice toppled Detroit when they were counting defaulted taxes as cash assets against bonds they were buying.
In short it’s just a question of when California will go bankrupt, not ‘if’.
Welp, let’s just sit back and watch...
“The problem in California is the Legislature has found ways to borrow against the pension fund “
Please explain.
“In short it’s just a question of when California will go bankrupt, not ‘if’.”
The state is so intrinsically rich, none of us will likely live to see it happen.