By Dan Walters
Published: Friday, Oct. 28, 2011 – 12:00 am | Page 3A
A few years ago, the California Public Employees’ Retirement System’s chief actuary gave what he assumed was a private briefing and described the huge system’s liabilities as “unsustainable.”
A journalist who heard the briefing published an account, thus letting everyone else in on CalPERS’ secret.
Officially, of course, the union-dominated CalPERS still contends that its unfunded liabilities are small and it can finance pensions for millions of government retirees and their families, now $20 billion a year, with, at most, only minor tweaks.
However, outsiders who have independently examined state and local pension systems have raised red flags about potentially hundreds of billions of dollars in unfunded liabilities.
Even union-friendly big city mayors, facing rising pension costs and major budget deficits, are calling for systemic changes, echoing that now-former Cal-PERS actuary’s warning about long-term consequences of doing nothing.
Gov. Jerry Brown, who was elected with critical union support last year, weighed in Thursday by proposing a 12-point pension reform plan that could, if enacted, significantly mitigate those consequences. And he used the same word – “unsustainable” – to describe the pension dilemma.
His plan includes higher contributions from employees, higher retirement ages, tightening of retiree eligibility for health care and a partial shift to a 401(k)-type defined-contribution plan.
Union officials immediately denounced it, saying, in effect, that they had already agreed to some minor changes in pension benefits and that’s enough.
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