Pebble Beach, CA State Pension Funds Face Huge Shortfallsby Richard Kuehn on 09/23/12
I've written many times s on my blog about the funding shortage at CalPers, the state retirement fund for public workers. The Wall Street Journal called attention to the situation and pointed out that California is not alone. Almost every state in the nation has made cuts to employee benefits recently, and yet there is still a funding shortage of almost $1 trillion in state pension funds across the nation. Unions are battling with legislatures across the nation, and some states are considering throwing in the towel and doing away with traditional pension plans for new workers. They would migrate to a 401K type plan like most private employers use. The cuts that Governor Brown made in California were called the biggest rollback to public pension benefits in the history of California. The savings are expected to reduce liabilities by a whopping $55 billion over the next several decades. But since most of the changes are for newly hired workers, the savings will come later, rather than sooner, so we are not out of the woods yet. Government jobs used to be seen as ones where you showed up for 20 or 25 years and then collected a pension but the times are changing. Going forward most public jobs will be more similar to those in the private sector.