The 17% number was mine….but it’s an irrelevant detail…derived from a misinterpretation of an aside comment that was not precisely worded and then incorrectly attributed…why are we dwelling on it?
The fact that GM has significant legacy healthcare costs is undisputed.
[quote]Yet a decade ago, most of the public employee retirement plans in CA were over funded. There was more than enough in the plans to cover all future obligations. The assertion isn’t necessarily wrong that we’re currently paying for employees that retired 20 years ago, but more accurately, we’re paying for recent investment losses, and insufficient funding over the last 5 years.[/quote]
And after umpteen pages he finally joins the scrimmage! Welcome to the game, dude!
So why weren’t the pensions funded – who agreed to it? Did the unions know that the pensions weren’t being funded? (I can’t believe that they don’t watch this stuff – or maybe they don’t care because they don’t have to?) And who should bear the cost of these “mistakes?”
It happens that the underfunding of pensions during the boom coincided with significant public-sector raises. That’s how San Jose cops ended up making so much. Did they effectively divert the pension contributions to cover the raises?
(I know people who stopped contributing to their 401Ks during the boom also. “My retirement fund is doing great, I can cut my 401K contributions and spend the money now!”)
So who pays for the shortfall? More importantly, why do we have a system where there even can be a shortfall? Why is it so hard to even calculate the amount of shortfall?
Why is the government even in the investment management business? An investment plan where only 15% are allowed to participate?
Why is it so complicated?
All of this mess goes away if you simply pay people (and fund their individual 401Ks) for the period that services were provided.[/quote]
They were not underfunded during the boom. From around 1990 through the middle of the last decade, most calpers plans were either very close to fully funded, fully funded, or over funded. It wasn’t until the market crashed did they become underfunded due to fund losses, and having nothing to do with insufficient funding from employees or sponsors.
This is it for me tonight, I’m off to my son’s graduation in nor cal.
