Pension crisis worse than suspected, report says
California’s public pension crisis is a lot worse than anyone suspected and threatens to bankrupt the state if investment rates fail, says a report released today by the California Center for Public Policy.
The report says that the state’s tax-paid pensions have made defacto millionaires out of most of California’s employees by the time they reach their late 50s.
Meanwhile, public safety and other employees frequently pay less than half or none of their retirement benefits, says the report, “Reforming Public Employee Pensions and Compensation.”
* Well-paid city manager agrees to pay cut * Dana Point city exec earns nearly $300K * Bad deal for California, good deal for public pensioners?
“Whether the standard is salary, working conditions, benefits or especially pensions, public employees in California receive compensation far in excess of what workers in the private sector do,” says the report. “It is illiberal and unjust.”
State public employees are among the highest compensated in the United States, says the study.
The crisis was caused by inaccurate actuarial assumptions on investment returns, the number of government employees in the future and how long retirees will live, the report said.
“Both the short-term and the long-term fiscal crises at the state and local government levels require change immediately,” says the study. “The status quo is unsustainable.”
The answer is to pay public employees fair salaries, benefits and pensions, not salaries, benefits and pensions greatly in excess of those in the private sector, the report advises.
The entire report can be viewed here:
http://taxdollars.ocregister.com/files/2010/10/Californiacenterforpublicpolicy.pdf
Basically, they have $500 Billion, but need $2,000 Billion over the next 20 years.
Game over.
