California Pension Reform: Too Little, Too Late
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  • Wayne Lusvardi

    If the pension cost savings from the joint proposal by Gov. Brown and the California legislature is $20 billion that is only 4% of the $500 billion in pension liabilities and would only kick in beginning in 2030 to 2050. So it wouldn’t help all those cities going into bankruptcy court now with excessive pension obligations.

    Cal-PERS, the California Public Employees Retirement System – claims the cost savings from this reform will be $60 billion or 12% of the $500 billion total unfunded pension liability. But once again, even if they are right the critical question is when: 2050?

    Also the 50/50 sharing of pension costs between employer and employee touted in the reform is only in truth 25% for the employee and 75% for the taxpayer. The pension plan is still predicated on a targeted 7.75% annual return which is unrealistic. So when you plug in a lower safe rate of return the true return is about half of the targeted return. That would mean that the employee would only be really paying half of 50%, or in truth 25% into the pension plan.

  • Jim.

    Democrats, working alone, cannot fix Blue because the will is lacking.

    They can work as a loyal opposition to think of ways to maintain as much Blue as our budgetary constraints allow.

    Until California and other Blue states find the will to elect a GOP majority to their state houses — and the trends are pointing in this direction — Blue will continue in a state of near-catastrophe with the occasional out-and-out collapse.

  • Sam L.

    Sometimes there’s quite a delay before realizing you’ve shot yourself in the foot.

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