From Mish comes a report of problems with pensions in California. This isn’t a surprise; our liberal state legislature increased pension benefits when times were good. Unfortunately, things aren’t so good today.
“I don’t want to sugarcoat anything,” Ron Seeling, the CalPERS chief actuary said as he neared the end of his comments. “We are facing decades without significant turnarounds in assets, decades of — what I, my personal words, nobody else’s — unsustainable pension costs of between 25 percent of pay for a miscellaneous plan and 40 to 50 percent of pay for a safety plan (police and firefighters) … unsustainable pension costs. We’ve got to find some other solutions.”
There’s really no choice: Benefits will need to decline in some manner or every government body will be declaring bankruptcy. This is a disaster that’s definitely going to rear its ugly head in coming years.