And now for the latest piece of news in a day that is just replete with green shoots. It appears Calpers has requested $600 million more in funding from the state government, completely disregarding that hours before Arnie was pressing legislators to cut the state's pension costs as he realizes that California with its $20 billion budget deficit is pretty much completely insolvent. As AP reports, "the development is driven largely by huge investment losses by the California Public Employees Retirement System, but also because people are living longer and retiring earlier." Well Austerity will take care of the latter, as for the former, Dr. Kevorkian is, unfortunately, unavailable. The onle winner out of this imminent fiasco: Leon Black, who as primary recipient of Calpers' generous capital, still continues to mindlessly blow money on soon to be bankrupt companies, with the hope that he can extract at least something out of them, even if it means taking a 70% IPO haircut (see Noranda).
More from Reuters:
The increase would be for California's next fiscal year, beginning in July, and would raise to about $3.9 billion the state's annual contribution to the pension fund, known as Calpers, the biggest U.S. public pension fund.
Schwarzenegger in unveiling on Friday his budget plan for the next fiscal year, said that overhauling the state's pension systems to reduce their cost to the state's general fund is a top priority, an idea backed by fellow Republicans in the legislature's minority.
Democrats, who control the legislature, are reluctant to take up the issue.
Pubic employee unions allied with Democrats are concerned their members could be placed into a two-tier pension system in which new public employees would receive reduced benefits.
The unions are also concerned their members would have to contribute more to their retirement plans.
A Calpers spokesman said the fund's request for additional state money follows a study presented to the fund's board last month that forced new actuarial assumptions to account for longer life-spans. He said the request also takes into account declines in the value of fund investments along with a policy aimed at improving the retirement systems' long-term funding.
h/t Leo K.