[quote=CA renter][quote=The-Shoveler][quote=The-Shoveler]I am wondering if this takes into account making CalPers Whole?
The City of L.A. is claiming a balanced budget as well At least they made the future hires retire a SS retirement age (67) instead of 55 and eliminated Pension spiking.
I wonder if the pension no-spiking rule can be retroactive.
Anyway it’s a start, I just have my doubts, sounds too good to be true.[/quote]
What shows up in the headlines and what does not,
I Imagine it is much the same for the state finances, well at least we are not going further in the hole right !
Stanford’s study also estimated that each of the city’s three independent pension funds is unfunded by billions of dollars: the city of Los Angeles Fire and Police Pension System is $9.25 billion unfunded; the Los Angeles City Employees’ Retirement System is $11.32 billion unfunded; and the city of Los Angeles Water and Power Employees’ Retirement System is $6.59 billion unfunded.
“In 1999, Los Angeles City’s aggregate annual required contributions for its three systems totaled $291 million, rising to $923 million in 2011, an annual average growth rate of 11.1 percent,” according to the Stanford report.
But here is the kicker: The growth in pension spending by the city “outpaced that of spending on public protection, which grew at 5.2 percent, on health and sanitation (3.6 percent), and on recreation and cultural services (5.8 percent), and it occurred while spending on public assistance programs fell by an average of 3.0 percent per year.”
If the trend continues, the city will be little more than a professional retirement payment and processing service.[/quote]
You’re ignoring the fact that many public employers enacted “pension holidays” during the stock market boom because the pension funds were over-funded. This is why pension critics like to use the peak years of the stock market bubble as a starting point. Many employers (and employees) were paying NOTHING toward pension contributions during those years. The few who were making contributions were doing so at a historically low rate. Contribution rates are not linear, and are tied more to investment returns than to population trends.
Look at pages 21 and 22 to get a better idea of what’s been going on with pension contributions:
Yea that was not the brightest Idea, but I guess they looked at the stock bubble returns and thought, Hey that looks like it will go on forever !!, kind of like the housing bubble as well.
But anyway there are probably a lot better examples of responsibility than the city of L.A. (Pension spiking was epidemic in L.A.) but it just happens to be the biggest in the state (although I will have to admit they did take some drastic measures to balance the budget this year, it’s just kind of futile at this point without some major inflation IMO).
But for L.A. anyway, it’s going to take an economic miracle for a 7-billion in revenue to make up for a 26 or so billion and growing short fall.
