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The Pension Monster that Devoured Education

"The retirement fund for teachers, CalSTRS, last week lowered the rate it expects to receive on investments. Gov. Brown's budget calls for $153 million more to offset the rate change.... CalPERS, which covers non-teacher [state] employees, also projects greater funding concerns because of promised pension and healthcare costs. According to [one] report, what school districts must contribute to CalPERS could double in just six years. On top of the troubles for local school districts, last month the University of California Regents agreed to a 2.5% tuition increase, in part, to cover pension costs."

What's Really the Principal Cause of CalSTRS's Shortfall?

"[A]ccording to CalSTRS's own data, more than three-quarters of the $48 billion increase in CalSTRS's unfunded liability between 2008 and 2012 appears to be attributable to an increase in liabilities. Less than 25 percent of the increase in unfunded liability appears attributable to a decrease in assets.... To this observer, CalSTRS's shortfall appears to stem less from the economic downturn and more from liabilities growing 70% faster than assets over the past 14 years."

For California Pensions, Math Is Already at Work

"A pension plan is not supposed to contain just enough assets to 'cut checks' to those next in line to receive them. Being fully funded is what allows the pension fund to realize the full returns intended. When a plan is only partially funded, every dollar not invested results in missed investment returns the plan was supposed to realize."

Moody's New Pension Rules Would Bankrupt Six California Counties

"Catch-up pension payments will have to increase in the six counties by 192 percent. And existing aggregate pension bond payments will have to be increased by a total of $177 million total in the six affected counties to avoid insolvency. As Dickerson states, this will result in consuming 98 percent of all the property taxes in the six counties for pensions only"