CA Unfunded Pensions Triple to $884 Bil | Chris Street for CalWatchDog

The cabal of California politicians, bureaucrats and crony consultants that justified the granting of lucrative benefits to employees, while failing to contribute enough to support the true pension costs, solemnly dismissed the Stanford report as unsophisticated reflections by academics.

But now that a swarm of local governments wants to abandon the floundering retirement trusts, the state plans are willing to credit only a 3.8 percent expected return.

If the California state pension plans adopted the same 3.8 percent rate they are only willing to credit when participants want to leave, their published $288 billion in pension shortfall would metastasize into an $884 billion California state insolvency.


If the pension investment returns skyrocket, the unions will bargain for increased benefits. If the pension investment returns crash, the public employees are protected by a rock-solid contract law that prevents any reduction in benefits.

In 2007, I was fortunate to gain the support of enough Orange County Pension Trustees to reduce speculative derivative use by 90 percent. At the time, trustees for the California state public pension plans solemnly dismissed Orange County as unsophisticated. Shortly thereafter, the stock market crashed and the state pension trustees stopped making comments.

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