California Common Sense and the Stanford Insitutue for Economics and Policy Research today released new findings that track 24 of the largest independent (non-CalPERS) public employee pension systems in the state. Critical findings include:
- The current cost of pensions for Contra Costa County as a percentage of the budget is 14.78%. The 2nd highest in Northern California following San Jose at 14.87%. Compare to San Francisco, 11.99%; Alameda, 10.45%; Sonoma, 6.91%
- The unfunded liability for the aggregated 24 systems is $135.7 billion.
- None of the systems is at or above 80 percent
funded, which is the conventional benchmark for the minimum funded ratio.
- The June 2011 funded ratio for the aggregated 24 systems is 53.6 percent, based on an assumed rate of return, or discount rate, of 5 percent.
- If pension systems assumed a 6.2 percent average annual rate of growth, which is a typical rate of return for private systems, pension costs would total 17.4 percent of all municipal expenditures.
- BUT—The 24 systems discount their liabilities at an expected rate of return, typically 7.75 percent. Taxpayers are on the hook for any short fall.
Vote to FixIt! for statewide pension issues on the newly launched CACS civic engagement platform at http://www.cacs.org/post/375125.