California's Slow Motion Pension Disaster (percentage, credit, salary, benefits)

[Mircea]

Originally Posted by Burkmere

Yes, unions pushing unrealistic pensions formulas and Democrats supporting this upcoming fiscal irresponsible fiasco.

The problem is you lack standing.

You cannot file suit on behalf of another, unless the other is your minor child or someone for whom you're guardian ad litem, like a physically or mentally disabled person.

To have standing you must have suffered some injury. Taxpayers sometimes have standing, because there are creative ways to finagle your way around standing.

A qui tam action might be one way.

You can get a forensic accountant to examine the "unrealistic pension formula" and if it's a Ponzi- or Ponzi-related scheme, you can get a judge to rescind it or at least blue-pencil it so it is no longer a Ponzi scheme.

Remember, the MAFIA controlled the unions that were created in the 190s and 1930s. They used union slush funds to launder money.

Then, mob accountants created union pension plans as a vehicle to launder mob money.

Later, when healthcare plans came about, the MAFIA wanted control of them to launder even more money. The MAFIA-controlled union for Inland Steel took them to task and that's what the 1949 In Re: Inland Steel Supreme Court decision was about: union control of healthcare plans.

The MAFIA also controlled public-sector unions for counties and municipalities like New York City, Chicago, Philadelphia, Boston, Cleveland, Youngstown, Akron, Detroit, Buffalo, Erie et al.

None of those pension plans were ever sustainable over the long-term, because they're all Ponzi-schemes predicated on an ever-increasing number of union members.

[Patrolman]

Originally Posted by Burkmere

Cities in CA don't have their own "pension systems." They generally are part of CALPERS. So if CALPERS is underfunded significantly (which it is) all cities belonging to CALPERS are in the same boat.

Of course they do. I receive my retirement through the Los Angeles Fire and Police Pensions.

[Burkmere]

Originally Posted by Patrolman

Of course they do. I receive my retirement through the Los Angeles Fire and Police Pensions.

I said "generally." Most cities are part of CALPERS. At least 95% of them. And yes, indirectly, I suppose taxes to contribute to agencies that must pony up money for contributions into the pension system.

Here's an article taken from the Sacramento Bee. But this should be common knowledge. Don't get me started on unsustainable Fire and Police pensions!! Criminal!!

"The report escalates the League of California Cities’ appeal for more flexibility in negotiating pension obligations. Almost all of California’s cities belong to the $360 billion California Public Employees’ Retirement System, and some cities over the past year have raised increasingly loud complaints that fee hikes from the pension fund are “crowding out” other spending priorities.

The new report warns that pension costs are becoming “unsustainable.” "

[artillery77]

Originally Posted by Patrolman

Of course they do. I receive my retirement through the Los Angeles Fire and Police Pensions.

Correct. CALPERS may service things, but nobody gets to sign up their town with CALPERS and expect another fund's good luck to bail them out.

In case you guys want to look up the cliff notes:

https://www.sco.ca.gov/Files-ARD/CAFR/cafr18web.pdf

Reading the financials is a nice way to gain perspective.

Even if you never look through them, it's worth checking out. CAFR's are written for readability. Management still gets to tell their fairly tales, but some sections must be told the truth on.

This is where you get to see who's lying to you. For example, we've all heard in the State how we have a rainy day fund from our surplus we're enjoying. After a decade of deficit, California is finally ready to claw its way back....on future growth of 3% increases each year in revenues.

Yet, page 10 shows that surplus in a funny way. It almost looks like we had a deficit, and said deficit increased significantly in 2018. I could be wrong, but it almost looks like we have a $229.8 B unrestricted funds deficit. (Restricted funds can only be used for the purpose the State received the money for.)

Now page 12 shows nice revenue growth on the top line...and there's the surplus...right above the transfers line......but then they cross it all out anyway and just put a new number at the bottom. Must have been a big restatement....and indeed it is part of the topic of the hour. The cost of health care benefits for pension recipients (you didn't think we'd just keep paying them only did you?)

At any rate...if I ended 2017 with a deficit of $29...but then restated my real start to $80, but then clawed $11 of it back, that's good right?

Maybe we'll skip the summary and jump right to page 32 for the real financials. There we have it. Near the bottom of page 33.
Post Employment Benefits Liability - $89B
Net Pension Liability - $98B

Well gosh, that's a bit large. That's more money than was spent on roads, buildings, prisons.....I would imagine they're going to be front and center ready to explain those. Or we can go to Note 9 on Page 106. They then talk about the $315B owed by the State.

Oh, but this number does not include costs not readily determined...just what's in Table 12. While the costs are State mandated, they cannot be determined at this time.....so we'll skip that as I guess it's not important.

At any rate, Page 108 makes it fairly clear anyway. We are paying for the debt servicing in order to maintain pensions of former employees. The majority of our money is not going for roads, universities, schools, prisons, welfare, public health....it's going to pensions. Finally on page 110, they tell you who is being paid.

Bottom of 111. The top employees of the state may retire at age 50 with 5 years of service.

In total, there are 670,341 people that are on California's PERF Plans. 317,822 are active employees.

Plan positions are on 116.

Interestingly enough, the groups that pay in the least and have the easiest qualification? Legislators and Judges. Makes sense from a longevity standpoint. Nobody starts as a judge. Legislators generally aren't meant to be lifetime occupations.....but therein is the rub isn't it. Both were likely attorneys beforehand. It would seem the promise big benefits later for service now has the very authors and protectors as the core beneficiaries.

Page 156-157. By using discrete units, the state avoids recording approximately $57B in liability in revenue bonds.

Back on track, now look at page 180. This puts the pension assets, liabilities and management assertions together. Whatever the math chosen, this is a comparative look. By keeping each group separate, these will continue to report through the entities they originated from.

So the next time you look and just know that as a Californian, we spend more than anyone else in helping fund education, the environment, roads, housing for the poor etc....realize what we mostly fund....where the majority of our money goes....is to the employees of prior years.

And they thank God every time the voters vote for some bond issue initiative because that means the manna will keep flowing from Sacramento.

[loves2read]

Originally Posted by RationalExpectations

California’s slow-motion pension disaster. Many states have the same issue.

https://www.mercurynews.com/2019/08/...-nl-opinion_nl <== possibly behind a paywall

https://www.ocregister.com/2019/08/1...sion-disaster/ <== The same article without a paywall

Sacramento city officials, led by Mayor Darrell Steinberg, have been discussing how best to spend proceeds of an additional sales tax that the city’s voters passed last year... In pitching for the tax hike, he said he wanted to ramp up spending for infrastructure, affordable housing, cultural amenities and incentives to attract new business, with an emphasis on improving conditions in the city’s poorest neighborhoods.

But...

The city’s current budget declares that over the next five years, mandatory payments to the California Public Employees Retirement System (CalPERS) will increase by 58 percent or $47.3 million a year – almost exactly what the extra half-cent of sales tax in Measure U would raise.

This tactic has been employed across the country. Communities MUST contribute more money to public sector pension plans. However, they know IF they put a measure on the local ballot saying "this money goes to fund the pensions of public sector employees" it will likely be voted down. So they instead put on a ballot measure for future popular stuff such as infrastructure, affordable housing, cultural amenities, with an emphasis on improving conditions... only to take the newly generated money and actually put it into public sector pensions.

Depends on the state but in some states the money can’t be used for anything except what the ballot provision calls for...

[Burkmere]

https://calpensions.com/2019/08/26/c...-decade-ahead/

[Coldjensens]

They can promise anything they want to get the workers they need. There is a simple way out. The City of Detroit declared bankruptcy and shorted all of the pensioners. Easy peasy, one year of pain and then you start over with a new group of pensions. Promise them anything. You do not actually have to pay it.

[homelessinseattle]

Not so in Illionois, pensions are a protected contractual agreement protected by their constitution.
The same contractual agreements should be honored across the entire country.
https://www.chicagotribune.com/news/...outputType=amp
Workers are not the boogeyman. If you're going to blame a group it's the management that got it wrong.

[Burkmere]

Originally Posted by homelessinseattle

Not so in Illionois, pensions are a protected contractual agreement protected by their constitution.
The same contractual agreements should be honored across the entire country.
https://www.chicagotribune.com/news/...outputType=amp
Workers are not the boogeyman. If you're going to blame a group it's the management that got it wrong.

It's very clear the people to blame are those who supported Unions' and other government workers' outrageous demands for unsustainable pensions. I think we know what "group" that is. It's those who are perpetually irresponsible fiscally and promise the sky to everyone in exchange for votes. They are always using other people's money anyway so what should they care?

It's a little late now to blame though. Maybe "blame" is the wrong word. "Primarily responsible" for this increasing pension mess is more accurate.

[Burkmere]

Originally Posted by Coldjensens

They can promise anything they want to get the workers they need. There is a simple way out. The City of Detroit declared bankruptcy and shorted all of the pensioners. Easy peasy, one year of pain and then you start over with a new group of pensions. Promise them anything. You do not actually have to pay it.

It's not so dire where pensions would go to zero, but I could certainly see CA pensioners (as well as other states' pensioners) taking a 25% reduction in pensions at some point.