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Pension Meltdown in California

The past few years have seen public pension systems dip into red all over the country. The problem is perhaps at its grandest in California, where the Sacramento Business Journal is now reporting that not a single local pension system has adequate funding.

California’s public pensions have universally failed to achieve the standard funding level of 80 percent or higher—many by an alarmingly wide margin. The Business Journal’s slideshow (available at the link above) of the state’s 24 largest funds is eye-popping. The best of the lot only reaches 70 percent funding, while the worst (Kern County) has an abysmal 41 pecent funding rate. The bottom of the barrel is pretty crowded, too: Eight of California’s 24 largest pensions systems have funding rates below 50 percent.

This is stark evidence of the crippling costs dragging down the blue model. Anyone relying on these pension plans should start working on a backup as soon as possible.

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