The California Public Employees’ Retirement System (CalPERS) announced a disappointing 1.1% return on their investments for calendar year 2011. By their own estimates, they need to average 7.75% a year to meet current and future obligations to its about 1 million members and 500,000 retirees. Some years, like in 2009 and 2010, they did better [...]
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The city said municipal workers must now pay 20% of their medical coverage and that everything was done to avoid this day but the unions wouldn’t budge. Mish Central Falls was bankrupt years ago and I said so repeatedly. The costs on taxpayers to delay this bankruptcy have been severe. Once states realize that [...] Government pensions, including CalPERS and the other public pension plans in California, are permitted to use far laxer accounting standards than private pension plans. This allows them to greatly overstate how much money they have and to understate future liabilities, something which does not bode well for the financial health of the funds or [...] California, along with many other states, has unfunded public pension obligations that it hasn’t the remotest possibility of being able to meet. A Stanford study last April determined California’s unfunded pension liabilities to be $500 billion. That’s right, California owes half a trillion dollars and it hasn’t a clue where the money will come [...] During the Great Depression, Congress passed an act saying states and municipalities could file for bankruptcy. The law was challenged and part of it was overturned by the Supreme Court in 1936 in Ashton v. Cameron County Water Imp. Dist. Congress then rewrote the law so that municipalities could file bankruptcy. However, the Supreme Court [...] Pensions eat 70% of Decatur, Illinois’ budget; New York City’s $76 billion shortfall; Houston Mayor wants pension benefit cuts The coming battles in 2011 over public pensions will be brass-knuckled death matches. Liberals, progressive, and unions howl that conservatives want states and cities to file bankruptcy so their public pensions can be re-negotiated. This [...] In 2008, the California city of Vallejo took the unprecedented step of filing for bankruptcy. A combination of falling revenues caused by the collapse of the real estate bubble and rising public pension costs cratered their finances. Other California cities and counties are watching how Vallejo manages, and may well follow suit. Indeed, former [...] 61% underfunded Illinois Teachers Pension Fund goes for broke, becomes next AIG-In-Waiting by selling billions in credit default swaps 81.5% of their portfolio is considered risky. Presumably their managers assume the fund will be bailed out if needed and, hey, they’re paying themselves big salaries and have no skin in the game, why should [...] Stanford University recently released an analysis of the three big public pension funds in California saying they are woefully underfunded, with a potential shortfall of over $500 billion, much larger than their publicly stated shortfall of $55.4 billion. They based this on assuming a 4.14% return, on what risk-free U.S. Treasuries yield, rather than [...] The CalPERS [The mismanaged, incompetently-run State of California pension fund] financial bomb has gone off. The blast wave hasn’t arrived to knock us all down is all. A deficit of $7.4 billion is projected for CalPERS by the end of the year. Look, I like unions and believe people deserve good pensions. But the [...] |  | ||||
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