Posted on 11/13/2017 11:39:45 AM PST by Oldeconomybuyer
During the next five weeks, the CalPERS board, custodian of $326 billion in assets needed to fulfill retirement promises for 1.8 million California public employees and beneficiaries, will make decisions affecting government budgets for decades to come.
The problem is, despite their fiduciary duty under the state Constitution to “protect the competency of the assets” under their absolute control, CalPERS is roughly $153 billion short of fully funding the retirement promises earned to date.
How did CalPERS dig this huge hole? During the last decade, they manipulated actuarial assumptions and methods to keep employer and employee contribution rates low in the short term.
Besides over-estimating investment returns, CalPERS uses very long amortization schedules to push debts onto future generations, greatly increasing the pension system’s long-term cost. As a result, CalPERS is just 68 percent funded, barely above what would be “critical” status for private-sector pension plans.
Simple math requires government employers and employees to contribute more money to fill the roughly $153 billion gap. Yet government agencies do not want pension costs to crowd out expenditures for other worthy programs. And government employees would rather have pay increases and force taxpayers 30 years later to finish paying today’s pension bill.
The state Constitution is very clear that protecting the assets needed to fulfill pension promises is CalPERS’ first priority. We will see whether the political temptation to take impotent half measures is stronger than CalPERS’ fiduciary duty to maximize fund security. The California taxpayers of 2047 have a huge stake in this decision.
(Excerpt) Read more at mercurynews.com ...
I spend a lot of time worrying about the pensions of California state employees.
Moonbeam-land.
Ludicrous to blame CalPers. They are just hired hands who carry out policy.
The issue resides with the State government.
Apparently Ponch is sort of a semi-Republican, and John got in legal trouble over — of all things — a pension scheme.
Only California state employees think about this.
The rest of us in California know we’ll never pay what the politicians have promised. We don’t give it a thought after that.
“wishing they were real CHiPs right about now”
My cousin was both CHP and then a Captain in the State Police.
He retired at 55 with lifetime, full medical coverage for both him and all dependents.
His retirement on top of that is $156k per year.
State employees never worry about this because taxpayers are obligated to make up the difference. Taxpayers never worry, because they can move to another state when the bill comes due.
To top it off he can carry concealed for the rest of his life and is never at risk for a DUI.
Paying people not to work was never a wise idea.
They simply will not pay.
Whatever they have to do.
If folks are gonna do that, they’d better make dang sure the state they move to will never do it...
by kicking the can down the road with offers of bigger pensions and benefits instead of working out something on wages that would come out of current funds and therefore, straight out of the pockets of the pols kicking the can.
um...they used the Illinois model ?
Pretty nice for him. I hope it lasts.
Note to Calfifornia’s taxpayers: leave faster.
“they used the Illinois model ?”
The ONLY difference is the amount of money CA has to work with.
He’ll likely die before the crunch time.
But a CHP that’s 30 yrs old today should be concerned. Very, very concerned.
“Opinion: How did CalPERS dig a $153 billion pension hole?”
They promised WAY more than they could possibly ever deliver?
They still get plenty of babes, don't they?
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