Zero Hedge: “The pension crisis is inching closer by the day. CalPERS just voted to increase the amount cities must pay to the agency. Cities point to possible insolvency if payments keep rising but CalPERS is near insolvency itself. It may be reform or bailout soon.” Steve Westly, former California controller and Calpers board member.
Westly was referring to an editorial laying out “the essence” of California’s pension crisis, exposed last week when the $350 billion California Public Employees Retirement System (CalPERS) made a “relatively small change” in its amortization policy.
Specifically, the CalPERS board voted to change the period for recouping future investment losses from 30 years to 20 years. While this may not sound like much, the bottom line is that it would require the California state government and thousands of local government agencies and school districts “to ramp up their mandatory contributions to the huge trust fund. more …
Opinion: None of the agencies or school districts can afford to ramp up contributions.
December 20, 2016 Fox Business: “The unthinkable just happened: For the first time in its 85-year history, the California Public Employees Retirement System, CalPERS, is drastically cutting benefits for public retirees.”
Dallas News January 19, 2017: “Dallas pension director blasts city’s plan to end pension as ‘worst display’ of ethics she’s ever seen.”
Dallas Pension News February 5, 2017 : “Dallas’ pension misery has company in Houston. Like Dallas, Houston is staring down billions of dollars in future pension payments that it can’t afford — and it needs the state Legislature’s help to fix it.”
A pension plan is a promise to pay a benefit to employees upon retirement. But according to recent shortfalls, that promise is all but gone without a bailout. Too big to fail, and all that is …
According to a Heritage Foundation article (here) December 21, 2017:
How Big Is Your State’s Share of $6 Trillion in Unfunded Pension Liabilities?
“Overall, the American Legislative Exchange Council estimates that pension plans have only about a third of the funds on hand—33.7 percent—that they need to pay promised benefits. Some states have significantly lower funding levels, which means they are at risk of running out of funds in the near future.”
(here comes the part where taxpayers need to hide their wallets)
“Once a state or local pension plan runs out of money, taxpayers have to fund the pension benefits of retirees as well as the contributions of current employees.”
It took $4 trillion to bail out the 2008-9 financial crisis so enjoy the little boom we are having because the only way for the US to pick up a $6 trillion pension shortfall is to go back to the future – QE 4:
‘When He opened the third seal, I heard the third living creature say, “Come and see.” So I looked, and behold, a black horse, and he who sat on it had a pair of scales in his hand. And I heard a voice in the midst of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not harm the oil and the wine.” Revelation 6:5-6