Stanford Study Reveals California Pensions Underfunded By $1 Trillion Or $93k Per Household

Tyler Durden's picture

Earlier today the Kersten Institute for Governance and Public Policy highlighted an updated pension study, released by the Stanford Institute for Economic Policy Research, which revealed some fairly startling realities about California's public pension underfunding levels.  After averaging $77,700 per household in 2014, the amount of public pension underfunding for the state of California jumped to a staggering $92,748 per household in 2015.  But don't worry, we're sure pension managers can grow their way out of the problem...hedge fund returns have been stellar recently, right?

Stanford University’s pension tracker database pegs the market value of California’s total pension debt at $1 trillion or $93,000 per California household in 2015. 

 

In 2014, California’s total pension debt was calculated at $77,700 per household, but has increased dramatically in response to abysmal investment returns at California’s public pension funds that hover at or below zero percent annual returns.

 

The Pension Tracker database (www.pensiontracker.org) is maintained by the Stanford Institute for Economic Policy Research (SIEPR) and is intended to help localize pension data by providing the ability to look up the market value of pension debt in any locality in California.

Looking back to 2008, the underfunding levels of California's public pension have skyrocketed 157% on abysmal asset returns and growing liabilities resulting from lower discount rates. 

Perhaps this helps shed some light on why CalPERS is having such a difficult time with what should have been an easy decision to lower their long-term return expectations to 6% from 7.5% (see "CalPERS Weighs Pros/Cons Of Setting Reasonable Return Targets Vs. Maintaining Ponzi Scheme")...$93k per household just seems so much more "manageable" than $150k.

Pension

 

Oddly enough, California isn't even the worst off when it comes to pension debt as Alaska leads the pack with just over $110,000 per household.

Pension

 

Of course, at this point the question isn't "if" these ponzi schemes will blow up but rather which one will go first?  We have our money on Dallas Police and Fire...

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Fester's picture

Pro Tip:

 

Get lots of Spiderman towels

Jim in MN's picture

Breaking news from BBC:  Pirate Party asked to form new government in Iceland

http://www.bbc.com/news/world-europe-38187599

 

Dormouse's picture

These taxpayers in California should be paying their fair share! Just skim it off the top of their bank accounts like they did in Cyprus.

InjectTheVenom's picture

coming soon to a leftist-run state/city near you !

philipat's picture

Why should the taxpayer be held reponsible for irresponsible promises by politicians and underfunding by both the local employers and employees in these plans which have unrealistic investment return assumptions in relation to both the upfront funding and the promised defined benefits? This is going to explode shortly all over the country because none of these plans is sustainable.

MANvsMACHINE's picture

Underfunded by $1 Tril with stocks at record highs? I guess it'll be Dow 30,000 soon enough.

Stuck on Zero's picture

What bothers me about the $93K per household is that half the households in California are on welfare.

LowerSlowerDelaware_LSD's picture
LowerSlowerDelaware_LSD (not verified) Stuck on Zero Dec 2, 2016 10:08 PM

And the generation snowflake crowd keeps voting for the people who put this burden on them to pay.  Government "educated" dumb shits.  Don't revolt for FREE $HIT, revolt for liberty.

Mano-A-Mano's picture

And yet the USG finds $BILLIONS to send to Israel every year.

http://biblicisminstitute.wordpress.com/2014/07/21/the-us-israeli-relati...

techies-r-us's picture
techies-r-us (not verified) Mano-A-Mano Dec 2, 2016 11:28 PM

They don't care about America.

Mano-A-Mano's picture
Mano-A-Mano (not verified) techies-r-us Dec 2, 2016 11:29 PM

I'm freakin pissed.

techies-r-us's picture
techies-r-us (not verified) Mano-A-Mano Dec 2, 2016 11:30 PM

With reason.

philipat's picture

Dear letsit, tazs, techies-r-us, stizazz, lock-stock, beauticelli, Mano-A-Mano, mofio, santafe, Aristotle of Greece, Gargoyle, bleu, oops, lance-a-lot, Loftie, toro, Yippee Kiyay, lonnng, Nekoti, SumTing Wong, King Tut, Adullam, espirit, rp2016, Holy hand grenade of Antioch, amongst many others, I wonder why you continue to talk to yourself? When you use honest disclosure of your Biblical site (Even though the site has no connection whatsoever to your comments) I will  not respond with a SPAM alert. So there is no need to talk to yourself to prevent my SPAM alert appearing right below your fake links. Unless you see the need to congratulate and/or reassure yourself on your clever comments, knowing that nobody else will? Alternatively, it can only mean you are seriously mentally ill. Talking to yourself is not good; you MUST remember to take your meds.

Manthong's picture

So what’s the big deal?

It ain’t nothing that a few more million welfare-breeding mexicans or $150,000.00 state worker pensions can’t solve

 

Kayman's picture

California is going to leave ?  No money-no tax base, and no water. Yeah, snowflakes, it sounds like a hell of a plan.

philipat's picture

Dear letsit, tazs, techies-r-us, stizazz, lock-stock, beauticelli, Mano-A-Mano, mofio, santafe, Aristotle of Greece, Gargoyle, bleu, oops, lance-a-lot, Loftie, toro, Yippee Kiyay, lonnng, Nekoti, SumTing Wong, King Tut, Adullam, espirit, rp2016, Holy hand grenade of Antioch, amongst many others, I wonder why you continue to talk to yourself? When you use honest disclosure of your Biblical site (Even though the site has no connection whatsoever to your comments) I will  not respond with a SPAM alert. So there is no need to talk to yourself to prevent my SPAM alert appearing right below your fake links. Unless you see the need to congratulate and/or reassure yourself on your clever comments, knowing that nobody else will? Alternatively, it can only mean you are seriously mentally ill. Talking to yourself is not good; you MUST remember to take your meds.

The Saint's picture
The Saint (not verified) Mano-A-Mano Dec 2, 2016 11:33 PM

If you live in California I think it is time for you to move before they figure out they have the power to tax you for this money.  Just don't move to Chicago!

 

Salzburg1756's picture

They should all move to Wash DC, according to that chart!

Bumpo's picture

Just become your own country and allow mass illegal immigration. Otherwise you're racist.

piliage's picture

So, if these morons decide to secede from the US, I guess they'll need to add this 90k to the 575k that they each owe as a % of their share of the 20 trillion US debt.

HedgeJunkie's picture

More like 75% here in So. Commiefornia after you count all on public payrolls.

Offthebeach's picture

Half are on Mexican/Muslin Everything Be Transfered....so they don't pay...they get, get it? That means per taxpaying household, it's more like $200k/TS. ( TS=tax sheeple )

Throw in another $200k/TS abd combined state and feral government is 400k/TS.

Detroit is the future.

auricle's picture

And that's with housing and stox at nosebleed levels. 

SilverSphinx's picture

Somebody's going to have to pay for all these babies, and it won't be me.

MGTOW and ghosting

mgtow.com

ToSoft4Truth's picture

The tax payers are responsible for the deferment of compensation. 

 

A deal is a deal. 

 

 

rccalhoun's picture

defferment of compensation?   go smoke some more herb.  govern,ent employees dont know what stress and hard work is.  they should get the minimum wage.

Antifaschistische's picture

maybe we have different definitions of a "deal", but a "deal" is a mutually agreed upon arrangement or contract with action and consideration.

There is no "deal" with taxpayers when .gov nepotists keep rewarding themselves and their fellow .gov'ers with higher and higher compensation packages and golden retirement plans.  There never was a deal.

piliage's picture

The deal stops at the California boarder. How's that secession movement going, by the way? Good luck with that, all of us outside California are pulling for ya...

piliage's picture

Aw c'mon, the law is for little people. Obviously you didn't get the memo....

If you've not seen it, one of my favorite moments from election night was when Chris Matthews gets hit upside the head with a clue bat on immigration, jobs, and the endless wars. It is particularly Epic when Rachel Maddow opens her cake hole and they have a good little spat on air. It still puts a shit eating grin on my face.

https://www.youtube.com/watch?v=MXxGPDBRUzs

Offthebeach's picture

No taxation without representation. 1790, one Federal Congressman per 20,000 voters. And basically a non existing feral government with few dictates. Now 600,000 per "represenitive". Three thousand percent dilution in representation. And loco, state and feral are crazy with laws, rules, codes, orders, dictates, regulations... So to watch over let alone represent, we are 30 thousand deluted in representative power.

Besides, states can go bankrupt. Happened massivly before Civil War. We also had a tax war in this country too.

ToSoft4Truth's picture

What do you want me to tell ya?

 

 

all-priced-in's picture

"The tax payers are responsible for the deferment of compensation."

 

Unless it was obtained fraudulently.

 

I say the public unions and elected officials committed fraud on the taxpayers - money was paid by the unions (in the form of campain contributions) to bribe the elected officials to grossly over pay them in both salary and benefits.

 

BTW - imagine how much they will be per falily when 75% of the rich people move out.

 

Or if you really want to dream big - how much they will be per family when California has a big quake and it ends up underwater.

 

 

 

ToSoft4Truth's picture

We see free lunch to the Snowflake crowd everywhere.

 

I don't think Trump should have created the "economic dislocation" by giving Carrier free money.  But he did.  "Conservative Snowflake Republicans" cheered.  Carrier Snowflakes echoed, 'this means jobs! Trump is great!'.  I bet one out of the 1,000 get their financial house in order over the next few years. 

 

The tax bailout to Carrier will add to an underfunded pension system in Indiana.  At first the Indiana government may under fund schools or police protection to get a new millage passed.  In the end, by the time Indiana needs a bailout for the pensions these "Conservative Republicans" will be long gone. 

 

Your earthquake strategy is the best approach from a liability point of view.  Create a bigger crime to cover-up a little'ur crime.  War with China on U.S. shores will wipe out most of the debt. (Germany finally paid off WW1 reparations in 2010).

 

But even war is obsolete.  If a 100,000,000 Chinese start marching across the Bering Strait, the Snowflakes will scream for tactical nuke use. 

 

Kayman's picture

TooSoft

Not much of an argument.  Private sector tax generating, family supporting jobs are the core of the nation.

Trump has no tools but the bully pulpit until Jan 20th. If you want to build stuff outside the USA but still think you are going to have free access to the largest consumer market in the world, think again.

We are $20,000 billion in debt because of "regime change" idiots, firing American workers to grow foreign competition, and replacing real income with private sector borrowing to fill the hole that the corrupt politicians created.

Adrian Monk's picture

I guess you are counting on a California pension.

Good Luck with that!

AnngeloJamaica's picture

take a look into the Demorats of Cali  you will find the loot  

firestarter_916's picture

Why should private sector employees be on the hook for public sector worker pensions?  Almost 90% of private sector employees will not see any pension income in their lifetimes.

Kayman's picture

The private sector working poor  are the slaves that pay the outrageous pensions that the public sector parasites have muscled out of the corrupt politicians. 

 

Kidbuck's picture

Why? Because the greedy dumb fucks voted to evade reality and support greedy dumb fuck politicians. Libs just wanna have fun, on somebody else's dime.

Arnold's picture

Because you can't squeeze blood from the Turnips.

But you can squeeze them.

TruthBeforeAll's picture

Why should the taxpayer be held reponsible for irresponsible promises by politicians...

Um, because they put those politicians in power?

Kayman's picture

The public sector voting bloc put them in power, not the private sector working poor.

worbsid's picture

The argument of course is that you elected these morons so you have to live with their decisions.  If they give your money away, it is your fault for electing them.  When all the people running for a political position are morons, then it is your fault for not standing up and trying to run for that position.  Yep, s/he is an idiot but s/he is our idiot.  

Paul Kersey's picture

One serious stock market crash, followed by a real estate crash, and all the pension dominoes come tumbling down. Normalized interest rates would bring on those crashes in a New York minute. As badly underwater as these public pensions may be now, these days will probably turn out to be the good old days.

venturen's picture

or just make your currency worthless...and then 1 trillion gets you a roll of toliet paper...and pension funding!

roddy6667's picture

Exactly.When the government has a choice of defaulting or inflating their way out of trouble, the latter always wins. The employees will get exactly the dollar amount their pension states. The COLA will be the same bogus fiction the government has been using, not the real rate.Because of real inflation in the real world, the pension checks will buy very little.

iThis is also the plan to pay off the trillions in bonds, bills, and notes.

During inflationary times you don't want to hold cash of stocks or bonds. You want real estate, gold, silver or other tangible wealth. Finance the real estate to the hilt and pay it off with rapidly depreciating dollars. Soon your mortgage will be like a car payment or even a bar tab. If you have rental properties you can charge whatever the market will bear.

 

Mikeyy's picture

Normalized interest rates (what would you call normal 6-7% ?) would fix the problem, wouldn't they?

Offthebeach's picture

Presently, at near zero interest rate, Feral gov pays 500 billion on interest. At 6-7%?, try 2 billion, just to roll over the notes.