It’s no secret that California has a serious pension problem that is weighing on the state’s budget with its massive unfunded liabilities growing by the day. The Association of California Cities – Orange County (ACC-OC) recently published a study on the current state of California pensions and the results are far from golden.
The group found that for the third year in a row, the California Public Employees’ Retirement System (CalPERS) failed to produce the revenues to meet its current obligations. If the CalPERS pension plan were liquidated, it would only be able to cover 68 percent of its current obligations. This is not a sustainable approach to handling the financial futures of retired public servants.
Pension benefits are becoming the largest expense in local budgets. This expense will continue to grow if municipal and state budgets do not allocate enough funding to cover this increasingly costly expense. It is time that California – and all states – treat pension funds as a current expense and not a problem down the road. The end of the road is here. We must fund pension plans today.