Rather a big deal, eh?
Now comes the politicking.
California should scale back pension promises to public workers and reshape the benefits system to make it similar to those used in industry to rein in costs, a state oversight panel recommended.
Government pension costs are no longer sustainable, the independent Little Hoover Commission said yesterday. It called on lawmakers and Democratic Governor Jerry Brown to hold benefits at current levels and recalculate yet-to-be-earned payments under a new hybrid that includes elements of a traditional pension plan and a 401(k) account where beneficiaries bear the investment risk.
The rising cost and underfunding of public employee pensions has sparked a national debate, most recently in Wisconsin where Republican Governor Scott Walker has asked the Legislature to boost contributions from state workers. California’s 10 largest public pension funds were short a combined $240 billion in 2010, the commission found.
“California’s pension plans are dangerously underfunded, the result of overly generous benefit promises, wishful thinking and an unwillingness to plan prudently,” commission President Daniel Hancock said in a letter to lawmakers and Brown yesterday. “Unless aggressive reforms are implemented now, the problem will get far worse, forcing counties and cities to severely reduce services and lay off employees to meet pension obligations.”...MORE