California and many of its cities will soon be paying more for public pensions after the state’s giant retirement system voted to change the way it calculates contributions. The move by the board of the California Public Employees’ Retirement System (Calpers) – the world’s biggest public pension fund with assets of $277 billion – was welcomed by the state’s Democratic governor, Jerry Brown, who had been pushing for Calpers to act more aggressively in how it funded the provision of pensions for city and state workers.
But higher pension contributions are bound to be met with angst by some California cities, which say they are already struggling to meet Calpers’s rate demands.read more...
Assembly Speaker John A. Pérez (D-Los Angeles) and Assembly Public Employees, Retirement and Social Security Committee Chair Rob Bonta (D-Alameda) today announced the Assembly’s intent to address the California State Teachers’ Retirement System (CalSTRS) funding liability this year, currently estimated to be $71 billion. Noting that delaying will only exacerbate the problem and that the economic recovery alone will not fully fund the liability, Speaker Pérez believes the solution will need to fall on all three sources: employers, employees, and the state.read more...
Gov. Jerry Brown’s image as a responsible, penny-pinching steward of California’s finances has been cemented in recent weeks because of his renewed call to pay off California’s “wall of debt.”
But look behind that $24.9 billion wall and you’ll see a $330 billion skyline of other liabilities threatening the state’s financial health. It includes $80 billion needed to cover teachers’ pensions and $64 billion to pay for state workers’ health care in retirement — two particularly troublesome liabilities because the state isn’t even making the minimum payments on them.read more...
When Stockton, California, filed for bankruptcy last year, the stage was set for a precedent-setting battle with Wall Street over whether bondholders or retired public employees should pay the price when a local government goes broke.
But under the terms of recent settlements, bond insurers who are backing about $240 million in city debt will accept a “haircut” of as much as 50 percent on some bonds. Retirees will keep their full pensions, though 1,100 of them will lose their retiree health insurance.read more...
The mayor of California’s third largest city offered a plan on Tuesday to help the state rein in spending on public pensions, drawing rebukes from a group representing public employees as well as the state’s pension fund for public-sector workers.
San Jose Mayor Chuck Reed said his measure, which he hopes to qualify for the November 2014 ballot, would urge voters to amend California’s constitution to allow local governments to reduce pension expenses associated with their current employees.read more...