By Don Thompson, Associated Press
Posted: 01/12/2014 02:41:40 PM PST
Updated: 01/13/2014 06:09:14 AM PST
SACRAMENTO — In Gov. Jerry Brown’s promise to start paying off California’s massive liabilities, the largest single unfunded debt will not be seeing any additional pay-down in the coming fiscal year.
The unfunded liability for teachers’ pensions stands at more than $80 billion, a gap so large that the fund is projected to deplete all its assets in about 30 years. It is the largest single component of the state’s unfunded retirement liabilities, which the Finance Department puts at nearly $218 billion, and of the state’s overall $354 billion in long-term obligations.
The deficit for the nation’s largest educator-only pension fund is so huge it would cost teachers, local school districts, community colleges and the state budget a combined $4.5 billion a year to bridge. The California State Teachers’ Retirement System says it grows by $22 million each day nothing is done.
Brown has no plans to start closing the gap in the fiscal year starting July 1. Instead, he said he will meet with the key players over the next year to create a plan for long-term solvency. The proposal, which he discussed Thursday as he released his annual budget blueprint, is likely to include higher contributions from teachers whose future pension checks might otherwise be in jeopardy.
The debate “is going to be quite contentious,” said Brown, a Democrat who is up for re-election this year.
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