Mike McDaniel has taken the lead in discussing unfunded public employees unfunded liabilities and has an excellent post at CABPRO Report on the Solution to Public Employee Pension Plan Crisis. He points to Sacramento for solutions, re-enforcing the position that it is Sacramento's problem, and the solutions will have to come from State and Federal officials.
Since Mike is the expert I will have to agree. However is this really just Sacramento's problem? I think it is our problem. As taxpayers we are on the hook for those unfunded liabilities according to an article in the Wall Street Journal: More Pain for State's Taxpayers, Cities
Other local officials said Calpers's losses would ultimately have to be covered by the taxpayer. "I think the taxpayers are going to be footing the bill for years because of less-than-stellar decisions on investments," said Brett Barbre, a director with the Municipal Water District of Orange County, whose employees' pensions are with Calpers. "This is going to affect every city, county and special district that is in Calpers. They will have to cover all of the losses, as well as the ancillary issues that are being uncovered."It is our problem because we let our local elected official raise benefits with out understanding the long term consequences when CalPERS was was flush with cash and charging low rates. I am not sure that most citizen were even aware to the actions and would not have understood the complexity of the CalPERs system it they had take then the time to investigate. I took several sessions with George Foster, who was on the Nevada City Finance Committee, before I understood the long term consequences of just bumping up the benefits a half a precent and the process of spiking retirement benefits.
It is our problem because we are going to be responsible for changing the politics in Sacramento. The current political class in Sacramento is under the control of the government employee unions, and are not going to make changes that impact their re-election revenue sources. Until the citizens of California retake control of our government, nothing is going to change, we will continue to be responsible for the uncovered losses.
This is an economic crisis that is going to payout on our watch, and it time to start paying attention. Mike has some excellent input on the SESF Blog here, here and here. George Rebane will be discussing the issue in his Union column next Saturday.
Exit question: What were those "less-than-stellar decisions on investments?" Could a lot of it be those Green Investments that that CalPERs made in 2008? As I recall the green energy indexes crashed much faster that the other stock market indexes during our current economic crisis, and the green indexes are still struggling to recover. (www.nexindex.com)