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Chiang added the various California public pension systems to his already large fiscal database. One chart reveals that their “unfunded liabilities” – the gap between assets and liabilities for current and future pensions – exploded from $6.3 billion in 2003 to $198.2 billion in 2013.
And that assumes a 7.5% real rate of return. Yeah, right.
I think in another thread people were pointing out that various trends are unsustainable. I believe this trend is also unsustainable. I wonder when the $ h i t will hit the fan.
And that assumes a 7.5% real rate of return. Yeah, right.
I think in another thread people were pointing out that various trends are unsustainable. I believe this trend is also unsustainable. I wonder when the $ h i t will hit the fan.
It won't.
Look at bankruptcy cases, pensions are left intact. The problem going forward is mostly solved. By law pensions have to be funded now. The legacy issue from decades and decades of mismanagement, however, remain and will remain. The excrement hitting the fan won't be dramatic. It will just look like what we're used to, higher taxes and less services. It's not really that the services are less but that we're now today paying the cost of providing the services 10, 20, and 30 years ago.
Look at bankruptcy cases, pensions are left intact. The problem going forward is mostly solved. By law pensions have to be funded now. The legacy issue from decades and decades of mismanagement, however, remain and will remain. The excrement hitting the fan won't be dramatic. It will just look like what we're used to, higher taxes and less services. It's not really that the services are less but that we're now today paying the cost of providing the services 10, 20, and 30 years ago.
Pensions may stay intact through bankruptcy however benefits can and often are reduce, sometimes greatly so I'm not sure what intact means but the underfunding amount should certainly be a concern for calpers covered folks
Pensions may stay intact through bankruptcy however benefits can and often are reduce, sometimes greatly so I'm not sure what intact means but the underfunding amount should certainly be a concern for calpers covered folks
I don't disagree, especially since CalPERS has been complicit in not requiring contribution increases when it really should have and just figuring it could make it up with above-market returns. That was kind of a timing issue in that they didn't want to mandate higher contributions at the height of the recession, but we're mostly through that. It does set a bad precedent, however.
Pensions don't really get reduced in municipal bankruptcies though. Just look at Stockton or Vallejo. Doesn't mean they can't voluntarily cut their benefits as was done in Detroit's case. Bankruptcy courts beating up on unions is a Breitbart myth, really. It's typical Conservative talking head stupidity. Huzzah for the judicial activism; God damn lawbreaking judicial activism. Anyway, it doesn't really occur in reality so counting on a bankruptcy judge to solve the pension problem by going berserk on pension benefits just isn't realistic. Realistic is higher taxes and fewer services. Maybe the unions play ball and agree to cuts (frequently happens), but they're not going to eat shirt.
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