The 24 largest independent pension systems in California, including Sacramento County's, are facing a combined $135.7 billion in long-term obligations that they won't have the assets to cover, a new Stanford University report says.
Sacramento County is carrying $4.75 billion in unfunded liabilities, according to the report, with a funded ratio of 57.5 percent. Those numbers are based on an assumed rate of investment return of 5 percent used by the university's Institute for Economic Policy Research.
Generally,
experts consider an 80 percent funding ratio for public pensions'
financial health, but that figure is greatly affected by what the funds
-- or in this case, Stanford researchers -- assume its investments will return. Many pension systems assume they'll earn 7.5 percent or more.
The average funded ratio of all 24 systems outside of CalPERS is 53.6 percent, using the lower Stanford investment return assumption. The research covers Alameda, Contra Costa, Fresno, Kern, Los Angeles, Orange, Sacramento, San Diego, San Francisco, San Joaquin, San Mateo, Santa Barbara, Sonoma, Stanislaus and Ventura counties. The cities whose pensions were examined include Fresno, Los Angeles,San Jose, and San Diego. The 24 systems account for more than 99 percent of independent system assets,Stanford says.
Between
1999 and 2010, the local municipalities' pension spending grew at 11.4
percent per year, more than the rate of growth for any other expenditure
category, according to the report.
California Common Sense also sponsored the research by Stanford professor Joe Nation and student researcher Evan Storms. In December, Nation published a report that concluded California's three big statewide public pension systems have a combined $500 billion in unfunded liabilities. Public employee unions and CalPERS rejected Nation's conclusions.
MORE PENSION MATH: Funded Status, Benefits, and Spending Trends for California's Largest Independent Public... Submitted by Peter B. Olinger
6 comments:
Wow. Worth every penny, I'm sure.
Time to shrink big government. Greece has no more private business. I read California is the next Greece. No business, No money. Get it? Build the Assisted Living Home. NOW! Get your ass back to work at the Council Meetings. NOW! Or else.
"Greece has no more private business." Huh? No more stores, hotels, restaurants, tavernas? That's a ridiculous statement.
"Vreeland told the Tribune he has had medical issues over the past year and has recently been admitted to a hospital. He said he is planning on resigning his seat on City Council because of these ongoing medical issues."
http://www.mercurynews.com/pacifica/ci_20013836
If public unions and city workers don't think their current and future pensions are at risk I have a Greek island I want to sell them.
All these bandaids we're talking about are drops in the bucket. Unless we seriously start taking these unfunded pensions you're going to see more cities and then whole counties going bankrupt real soon.
It is unsustainable to have two people retired at 90% of their pay for every worker on the job.
Even after severe cuts San Francisco is still in deep trouble http://www.sfexaminer.com/local/2012/02/even-after-pension-reform-costs-will-surge-coming-years.
Just increasing the pension contributions by employees is not going to avert a total collapse of the system.
Public employees need to be on a system that is closer to what WE the people that pay them get.
I think the max for SSI is about $2000 per month and we can't retire until 62.
Post a Comment