[quote=harvey]Although I’m not surprised by this ruling, it’s difficult to say to what extent it can be used to predict the outcome of California’s pension crisis. States cannot file for bankruptcy, and many of our municipal pensions are legally entangled with the state pension system.
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States can’t declare bankruptcy but they can default. Look at how the state resorted to paying bills in IOUs a few years back. What if the state just skips a pension payment, and then another every time it doesn’t have the money. You’ll never get that missed payment back because the payments stop when you die. What if they pass a special pension income tax. We honored the promise we just paid for it by taxing the recipients.
The net result is the same. Even if we get the inflation solution that some here like to claim is a solution. They will play with the CPI numbers so that your payment won’t go up as much as the inflation. Bottom line is most public employee pensioners are not going to get the 60%+ of highest salary in purchasing power during retirement. They’ll likely get something unless the current beneficiaries and courts decide the pension fund balances need to be zeroed before doing something.
