With a new ballot proposal reigniting debate over government retirement benefits, the latest federal figures show California’s public pension debt in 2013 stood at $4,425 for every man, woman and child in the state, despite strong investment returns by public retirement funds.
The per-capita obligation ranked 11th highest among U.S. states, according to a Sacramento Bee analysis of latest data by the U.S. Census Bureau. California’s total pension debt, $610.3 billion, is the largest in the nation.
Such statistics will likely pour into a complex debate over state and local public retirement benefits in the new few months. The ballot proposal aimed for the November 2016 election would, among other things, change California’s constitution to require that voters approve public pension enhancements. Unions oppose the measure as an attack on working people disguised as voter empowerment.
California, the nation’s most populous state, also has more government workers than any other. Nearly 1 in 10 Californians belongs to one of 85 government pension systems, according to a new report by Kevin Cook of the Public Policy Institute of California. About two in three pension members belong to either the California Public Employees’ Retirement System or the California State Teachers’ Retirement System.
Those two public pension funds, the largest and second-largest in the nation, respectively, are still recovering from the losses during the recession. Despite significant investment gains in 2013, the disparity between the plans’ obligations and the value of assets stood at $62 billion for CalPERS and $74 billion for CalSTRS.
CalPERS has since raised rates on employers in the fund, and lawmakers have approved higher contributions to CalSTRS. A 2013 law also rolled back benefits for new public pension system members.
Cook says the gap between unfunded liabilities and assets suggests that the systems “have been underfunded over time.” Retirees are living longer, further pressuring the funds, he said.