California Pension Funds Lower Earnings Forecast
The Sacramento Bee reports the California Public Employee Retirement System has lowered its earnings expectations from 7.5% to 7%. That may not seem like much except when we're talking about billions of dollars, never mind the funds being underfunded already.
what this means is cities, counties and the state might have to get more more money from taxpayers to cover the shortfall. That tax money, instead of being used for current government services, will be used to pay pensions. All of this, though, assumes their estimates of lower earnings are accurate.
The pain won't be felt by communities right away as payments will be phased in starting next year:
" The state will start to absorb the impact of higher rates with the start of the new fiscal year next July. Municipalities and school districts won’t start feeling the effect until a year later. All told, the higher contribution rates will be phased in over eight years."
The public employee unions will continue to tell us nothing is wrong with the situation. I actually sympathize but am like most people who would rather my tax money pay for current programs than for employees that aren't working anymore. This situation has been festering for some time. It doesn't seem anyone in government at either the city or state level has the courage to deal with it effectively.