Politics in the Zeros

The coming battle in public pensions is between CalPERS, the biggest public pension fund in the country, and bond insurers who want pension payments made by bankrupt municipalities to CalPERS cut. This could mean that pension contracts made with bankrupt cities could rendered void. Public pensions in California are supposed to be sacrosanct and untouchable. [...]

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The two major California public pension funds have a combined unfunded liability of about $72 billion (PDF- Pg. 41). Yet Gov. Brown just postponed a pension reform ballot measure and instead is making vague promises about how change will come while offering no concrete proposals. A Field Poll says voters are not too concerned about [...]

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Voters in San Jose and San Diego will decide on Tuesday whether to approve measures to lower public pension costs by reducing benefits. These elections are critical to the public pension reform movement, with many across the nation watching these bellwether votes. If the measures pass, they will provide momentum for other municipalities to use [...]

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Public pensions across the country generally calculate future liability by assuming an 8% rate of return. “The problem with that is the 8 percent assumption is totally bogus,” says Connecticut columnist George Gombossy, noting that that public pension returns there have averaged just 5.7% for the past ten years. Most other states have similar problems [...]

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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 bankruptcy [...]

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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 for [...]

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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 from. [...]

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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 [...]

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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 is [...]

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