[quote=CA renter]
Big difference: the PBGC is a public *insurance* entity for *private* pension plans, and they have little control over these pension funds (especially before the Pension Protection Act of 2006), whereas the state and local pension funds are NOT insurance funds for pensions; they are the pension funds themselves, and have more control over the types of investments and contribution requirements for covered pensions.
[/quote]
Which is why I specifically stated “it’s not an apples-to-apples comparison.”
California’s state constitution is its own beast but – and I quote Gene Fama here – “Most state constitutions provide that the state first has to service its debt, then make its pension payments, then pay for services. What remains to be seen is whether this order will be enforced when – not if – a state declares bankruptcy.”
