California has a surplus, but retirement liabilities remain

January 19, 2016

californiaA few years after California faced a $26 billion deficit, lawmakers are debating how to spend a budget surplus. However, state officials have not tackled California’s unfunded pension liabilities problem, which is continuing to grow. [Contra Costa Times]

The state has amassed $220 billion of unfunded pension and health care liabilities for future retirees. As of June 2014, California’s two main retirement systems had a combined total of $116 billion in unfunded liabilities. The state health care plan has about $70 billion of unfunded liabilities.

Gov. Jerry Brown is now asking workers to pay more to fund their retirement health benefits. Brown is requesting that employees pay into a fund through deductions in their paychecks. The state would pay an equal amount under the governor’s proposal.

Brown is also proposing $350 million in pay raises in the current budge. The pay increases may be used as a bargaining chip in labor negotiations.

Last year, the state reached a deal with its engineers’ union on health care contributions. The engineers agreed to relinquish an increasing amount of their pay, which would eventually reach 2 percent of their salary. But, they also received pay raises of 5 and 2 percent.

The state is currently negotiating with four of its 21 bargaining units, and talks with 15 others are due to begin this year.

California legislators passed pension reform in 2012, but the reductions in retirement payments primarily affect new employees. The unfunded liabilities have remained.

On Monday, the leaders of a state pension reform initiative announced they are postponing their campaign and seeking to qualify for the 2018 ballot, rather than the 2016 election. [LA Times]

Former San Diego Mayor Chuck Reed and former San Diego Councilman Carl DeMaio are aiming to get two separate measures on the ballot. One would require voter approval for defined-benefit pensions for new workers and the other would limit what the government can pay toward the retirement benefits of new employees.


A surplus with a huge liability, sounds like double speak but we see it at all levels of government.


One small correction…

Chuck Reed is the former mayor of San Jose, not San Diego.


Lol A bunch of noble prize winning economists we have here.


In the olden days, you took a government job because if was stable and had a retirement. You could generally receive higher pay if you worked in the private sector. It was understood that you were working for the greater good of everyone. This was sort of an unwritten agreement of everyone in the system.

Today, the bean counters took over and gave themselves raises and bloated their ranks while implementing various cost cutting measures on everyone else. You see this all the time in local government. How many times did someone get a large raise a week before they retired? Look the rise in 6-figured salaries. Look at flat wages of everyone who’s not a bean counter. Look at the rising number of bean counters and the falling number of people who actually do the work. Local bean counters have higher salaries than the governor of the state. Academia? Don’t get me started here.

Unions? Don’t blame them, they’re failing miserably. Keep in mind that a significant portion of this retirement money goes to teachers and secretaries that worked their butts off for years while receiving relatively low pay. If you’re going to blame someone here, blame the people at the top who perverted a once good system.


You may think unions are falling but they are as much responsible for the problem, plus those at the top were once at the bottom, so basically the system is broken completely through, time to file bankruptcy and start over.


“those at the top were once at the bottom.” Buddy, you don’t have a clue how America works. That’s not reality. Those at the top were likely born at the top. Those at the bottom were just as likely born at the bottom.


Sorry I do, if you are talking about about the outside world, you are correct but it is different in the government world.


If they have unfunded pension liabilities, then they do not have a surplus, they have massive debt.

The pay increases, which increase the pension liabilities, will add to the debt.

Good for buying union votes, though.


Lol. $220B. You all do realize that $220B is 4x Bill Gates net worth? Bill Gates could buy every piece of property in San Fran outright. What a ponzi scheme.


Starting in May the estimated 180,000 illegal children under the age of 19 will be given MediCal in California and this will include healthcare, dental and vision. This will have a very high price tag so I suggest they hang onto that money so they don’t come back and asl us for more tax money to pay for illegal children healthcare when I can’t even afford it for my own children.



That right no conversation about California is complete without bring up illegals illegals illegals illegals illegals. You can’t bang the race drum so lets pretend it’s all about money money money.

Easy solution to your issue SLOBIRD…. Arizona >>>>>>>>>>>


Kettle, why do you always bring up the race card?

California government says they have surplus. I say you don’t have a surplus because according to their figures they will have at lease 190,000 children 19 and under that will be getting healthcare, dental and vision which is going to cost a lot of money. I say hangon to the surplus they mention (which is fake because they owe the Federal Government $8 Billion for Unemployment Benefits paid during the recession and $650 Billion unfunded pension liability) so they come back and ask taxpayers to pay more taxes for they misapproriations. People need to provide for their own first and then help others.

It is about money, everyday, providing for my family and taking care of my responsibilities without having to ask my follow taxpayers to pay for my family, their healthcare, food, education, care, phone, computer, utilities, etc.

You obviously like socialism so may I suggest a one-way to Sweden, they would love to have you and yours!

Kaiser Bill

The illegal aliens won’t be getting Medicare once the Deportation Force is put into effect in January 2017.


How can you possibly have a surplus when the state has amassed $220 billion of unfunded tension and health care liabilities for future retirees. As of June 2014, California’s two main retirement systems had a combined total of $116 billion in unfunded liabilities. The state health care plan has about $70 billion of unfunded liabilities.

It must be the new math………/xhp3ac_ma-amp-pa-kettle-…


California still owes feds $8 billion for unemployment insurance,