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California Pension Facts

Taxpayer contributions into California’s 85 public employee pension systems totaled $17.4 billion in FY 2010-11. This is 5 times more than the amount paid in FY 2000-01.

Source: CA State Controller, “Public Retirement Systems Annual Report”: FY 2010-11 & FY 2000-01

California’s public employee pension systems collectively reported $158 billion in unfunded pension liabilities and had an aggregate funding ratio of 79% as of June 30, 2011.

Source: California State Controller, FY 2010-2011 Public Retirement Systems Annual Report

Many pension experts, including the Stanford Institute for Economic Policy Research, have stated that the California’s true unfunded liabilities are hundreds of billion of dollars higher than officially-reported figures due to the optimistic assumptions that are currently used.

Source: Stanford Institute for Economic Policy Research, Pension Math (Dec. 2011) & More Pension Math (Feb. 2012)

.In addition to pension obligations, the State of California and the state’s 20 largest cities collectively have $78 billion in obligations for retiree healthcare benefits but had only set aside $4 billion. Most of these government employers have not put aside any funds.

Source: California Common Sense, California’s Neglected Promise: How California has Failed to Prepare for its Accumulating Retiree Health Care Obligations (July 30, 2012)

CalSTRS, the state’s pension fund for teachers, is significantly underfunded.

  • CalSTRS’ actuary calculated the plan’s funding ratio at 66% (as of June 30, 2012) and estimated that the fund would deplete all of its assets by 2044.
  • CalSTRS is only 44.7% funded under new GASB rules adopted in 2012.
  • CalSTRS needs another $4.5 billion per year to be fully funded in 30 years.

Sources: CalSTRS, Sustaining Retirement Security for Future Generations (February 2013); CA Legislative Analyst’s Office, Addressing CalSTRS’ Long-Term Funding Needs (March 20, 2013); CalSTRS, Government Accounting and Standards Board Pension Accounting Changes (Sep. 10, 2013)

.As a result of new actuarial assumptions designed to achieve full funding, CalPERS member agencies expect to see their annual pension contributions will rise by roughly 50% over the next seven years.

Source: Reuters, “Calpers approves employer rate hikes of up to 50 pct” (April 17, 2013)

The average pension payment statistics often cited in CalPERS and CalSTRS reports are not indicative of the generous benefits offered today because they include employees who only spent part of their career working for the government and employees who retired decades ago under more modest formulas. According to the Stanford Institute for Economic Policy Research:

  • The average CalPERS annual pension benefit for recent career retirees is $66,828.
  • The average CalSTRS annual pension benefit for recent career retirees is $67,980.

Source: Stanford Institute for Economic Policy Research, Pension Math (Dec. 2011) & More Pension Math (Feb. 2012)

"Growing pension liabilities have been sucking up larger and larger shares of public coffers, leaving less money for actual service. That´s an insane trend that has been one of the factors (exacerbated by the recession, of course) in the continuing ill-health of California cities. And for already bankrupt cities like San Bernardino, such a exemption of the law would lift a heavy burden."

Los Angeles Daily News

Statewide pension fight brewing for 2014 or 2016
10/14/2013