CalPERS seeking $200 million increase in funding

March 13, 2011

CalPERS staff has recommended a small change in investment projections that is likely to cost California $200 million or more.  [MercuryNews]

The California Public Employees’ Retirement System Board had estimated that the pension fund’s investments would make 7.75 percent interest in future years. The staff’s current recommendation is based on a general consensus that investment returns are likely to be lower than earlier estimates.

Staff’s recommendation to lower the assumed interest rate to 7.5 percent would leave an additional shortfall that could be funded through California’s general fund or taken from the state’s operating budget, which is already facing a $26 billion deficit.

In February, CalPERS officials estimated the pension fund shortfall at about $75 billion.

Making up these types of shortfalls generally is the responsibility of employers, which in these cases are  government agencies that typically cover expenses through tax dollars.

Opponents of the current public pension system contend that at its current level of benefits, it is unsustainable. The pension plans that benefit many government employees, where retirees are guaranteed a defined benefit package for the rest of their lives, are not generally in line with private sector retirement programs.

A recent report by an independent state auditing agency, the Little Hoover Commission, estimated that the 10 largest California public employee pension plans are facing a $240 billion shortfall. To make up for the deficit, some cities will have to spend one third to one half of operating budgets to support retired government employees.

Defenders of the system blame the recession and its effect on interest rates. They contend public pensions and benefits are reasonable, justified and can be sustained over time.

Last year, the CalPERS board demanded an approximately $400 million cash infusion from the state. The board is not required to get legislative approval.

When the board meets this week, it could leave the assumed interest rate unchanged which would eliminate the need to bring in more money during the following fiscal year.

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Thanks for putting that link up danika. This is exactly the sort of thing that many have been complaining about. It’s time for the taxpayers to say enough is enough to these crooks, let them get a 410K like the rest of us. I also hope the people who are responsible for these abuses spend some time behind bars.

How will a 401K run by crooked politicians be any better?

For those of you with a short memory, CalPERS had a surplus prior to the Wall Street and real estate meltdowns. CalPERS had so much extra money that employer contributions were reduced and member benefits were increased. In retrospect, they shouldn’t have been and the most generous pension plans must be scale back.

However, CalPERS was burned by Enron, the banksters and others on Wall Street just like the rest of us. The perpetrators of this mess (the banksters and Wall Street) got baled out by the Feds, but the rest of us did not.

We should be fighting to make the economic system more fair for all of the working people of America, not squabbling amongst ourselves for the scraps.

This won’t end untill we are all broke…even the public employees.

That is where we are now, just in denial.

We’re not broke. The top 2% of the wealthiest people in this country have our money, we need to stop them from taking it overseas and make them pay thier fair share of taxes as the rest of us do, then we can get back some of our money. Until we stop letting them take our money and jobs we will be hurting.

“We are not broke”. Seriously??? Does the $14 TRILLION deficit know that? What color is the sky in your world????

We, the middle class working people of America are broke, yes. However, our money just went to the top, and some shipped out overseas faster than Chinese goods were coming in. The banks and large corp’s have all the coins. They want us to cut back, so they can keep more. What exactly is a bank? What do they provide? Don’t they lend out our money? They don’t manufacture a good, so where does all their profit come from? Could it be on the back of the general public?

The corporation owned Gov’t of the good old US of A want us to believe that we are broke. Folks, there was at one time so many “dollars” in the US, do you think they just dried up and are no longer in circulation? Wrong, in fact a private bank, The Federal Reserve, continues to literally print these dollars that are backed by nothing, absolutely nothing, and loan them out to us and expect real dollars that have been earned/worked for in return, at interest. The money is at the top, more concentration of wealth in fewer hands. We are being lied to and royally Rat F***ed.

Bert, you said it much better than I did, perhaps Danika will be able to comprehend what you’re saying,,,,but I doubt it.

Who took your money? What is this with the class warfare, it’s not the solution.

The solution is to grow the economy by creating more sustainable jobs and more taxpayers.

good jobs = high pay and sustainable, which creates tax payers. Only the top 50% of income earners are now paying income tax. I wonder what the best way to create these jobs is?

Hint: It is not the public sector unions….

I’m ready for middle class warfare. We need to declare war on the wealthy and the right before there isn’t any middle class left. I know that you righties hate unions but in the following link there is a great article regarding how the current tax system works and the (IMO) very interesting history of taxes.

For 10 years these tax cuts for the wealthy were supposed to create jobs,,when is this supposed to happen? Are we to wait another 10 years. Personally I was doing much better before the Bush tax cuts and I believe that most of the country was doing much better as well,,how is that so difficult for the extreme right to see. I say extreme because I’m starting hear more and more cons agreeing with this. The wealthy are outsourcing, they are going off shore, they are not paying thier fair share and they’re certainly not creating jobs,,,well they are creating jobs for other countries but not this country. You people always say that we are un-American, it certainly seems to be the other way around. If the wealthy want to make money for other countries then they need to leave this country and stop getting wealthy off the backs of the middle class. They should move to India and they shouldn’t be allowed to do business with this country unless they are going to manufacture here and keep their money here. Do you not see that we were in better fiscal shape when wealthy paid more taxes? Most of the middle class are willing to pay taxes but not the wealthy, they want their cake and everyone elses as well.

Bank executives received record bonuses over the last two years. Did you get a million dollar bonus,,or any bonus last year? Did the feds come in and loan you huge amounts of money so you could make record profits and bonuses? Go see if any of these bailed out banks will loan you money as we did for them. Even people with the best credit that have never had a late payment can’t get a loan now. Why are these bankers making record profits and bonuses? How are they making all this money while the rest of us worrying about how to buy groceries? The wealthy are getting wealthier and the middle class are becoming poor. It’s shameful.

The US is now divided into 4 distinct tribes: The Wall Street / banking class, the political / ruling class, the public sector working class, and finally the private sector working class who are bled dry to support the above three.

God help us.

@sewer…that is an interesting observation of our current workforce stratification. The banking class is clearly taking more than their fair share; the political / ruling class is becoming more and more self serving and corrupt; and the public sector working class has grown beyond a sustainable level. I belong to the unfortunate 4th class, the private sector working class, who works hard to support the other three classes. Since the three classes I work hard to support mainly supply services and not durable goods, we will have to wait until our political / ruling class allow a true market adjustment to take place (a real crash) before our banking and public sectors are “right sized” in terms of workforce size and compensation. I read a few days ago that Bernie Madoff said that the U.S. economy was a Ponzi scheme. This is probably not far from the truth.

The public sector employees are not the brightest by far. Public sector jobs are for those who can’t make it on their own. They may have had good grades in college or whatever because mommy and daddy paid there way. For those of us who had to work hard to get where we are are the brightest. Cut the pensions in half and say tough crap. If they don’t like it friggin quit. We don’t need 25% of them right now.

What a stupid thing to say.

I say go for the nuclear option. The state of California file bankruptcy. All union contracts become null and void. Then you start over.

I agree, it’s time to file bankruptcy and start over. I also believe that we private citizens should not be responsible for the performance of their personal investments in the future and never should have guaranteed their pensions performance in the first place.

I have to laugh when they say if we don’t pay through the nose and out the ying yang, then we can’t attract the best and brightest servants. The state of their own Employer paid retirement plan speaks for itself, our servants (the best and so called brightest) are incompetent and fiscally irresponsible. They aren’t capable of running a business and they are too spoiled to work for the private sector but that is no reason to guarantee them a job or pay them better than we pay ourselves.

Maybe next time, before you start calling others incompetent and saying how bankruptcy will save the state, try doing some basic research. States CANT file Bankruptcy. If you don’t believe me do your own research and Google it

Cindy. I see backseat is right. I was under the assumption (I know what they say about assume) that because local cities and counties could file that the state could. Now I see they can’t. So to backseat I have the answer. Let’s get ALL 58 counties to file!!! That will solve the problem.

Forget it, get your lousy bureaucrat hands off my wallet.