California’s pension woes have been national news for a while, but now, thanks to state Controller John Chiang, the dismal figures are compiled in one place for all to see. And dismal barely begins to cover it, according to the AP:
A decade of financial data posted by Controller John Chiang on his open-data website, ByTheNumbers.sco.ca.gov, shows that the state’s 130 public pension systems are carrying $198 billion in unfunded liability in 2013, compared with $6.3 billion of unfunded liability in 2003.The systems run by the state, cities and other government agencies range from the nation’s largest public pension system, the California Public Employees’ Retirement System (CalPERS) with $281.1 billion in assets in 2013, to the smallest, the City of Pittsburg Miscellaneous Employees’ Retirement System of 1962, with assets of less than $9,000. […]The controller warns that many of the state’s public pension systems are unhealthy. In 2013, there were 17 plans that were underfunded by at least 40 percent, and another 45 were funded between 60 and 80 percent. Only 22 were funded at over 80 percent, the benchmark often used to measure solvency.
Here’s the extraordinary explosion of California’s unfunded liability in one graph:
People forget (or hate to acknowledge) how bad the country’s pension crisis is, but if anything, the figures they would rather not see are still too optimistic. As Dan Walters of the Sacramento Bee notes, all of Chiang’s figures are based on the current, official asset-earnings rate of 7.5 percent. But that’s almost certainly too high, perhaps drastically so. When CalSTRS (the teachers’ pension fund) decided to reduce its assumed earnings from 7.75 to 7.5, analysts told the fund’s board to expect less than 7 percent for the next 10 years. LACERA (Los Angeles’s public employee pension fund) also dropped its assumption from 7.75 to 7.5 percent last month, though a city commission convened by the mayor had suggested 6 percent might be more advisable. The city’s budget overseer protested that such a low rate would add a staggering amount to LA’s debt load—$566 million.Walters describes Chiang’s new addition to his website as a “bombshell”—and it is, because it gives easy access to numbers normally buried in a labyrinth of spreadsheets. The average voter will be able to figure out exactly how badly off her city’s pensions are, and perhaps vote accordingly. As they might say, the truth may first be painful, but then it sets you free.