By Dan Pellissier | Capitol Weekly — As many Californians fill up gyms, bike trails and jogging paths to act on their New Year’s resolutions to improve their personal health and fitness, this year California voters will fill voting booths to kick the $240 billion pension debt habit that is overwhelming our budgets and damaging our fiscal health.
Over the years, CalPERS and other pension fund administrators have worked hard to minimize the impact of the stock market losses that make it much more difficult to service this huge pension debt, yet repayment periods can only be extended so far and rosy market return assumptions are looking more ludicrous each quarter.
CalPERS and other government pension plans assume they will earn at least 7.75 percent return on their investments, while the world’s most successful investor, Warren Buffet, assumes his pension funds will earn just 6.2 percent over the next decades. If Buffet is right, California’s true pension debts approach $500 billion. In 2009, former CalPERS head actuary Ron Seeling called the state’s pension systems “unsustainable” and said we have to “find some other solutions.” Read the entire article . . .
Dan Pellissier is president of California Pension Reform.