"An issue in the San Jose pension reform trial, a '13th check' bonus for retirees when investment earnings exceed the annual forecast, reflects a widespread attitude that added to public pension debt. In its starkest outline: When pension fund earnings are above the target, it's a surplus or windfall that can be distributed to employees and employers. When earnings are below the target, it's a shortfall that must be paid by taxpayers.... [T]reating investment earnings as an excess or surplus, in ways large and small, has skimmed off money that could have been invested, adding to pension debt rather than lowering it."

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