San Diego Union-Tribune Editorial

Finally, honesty

CalPERS actuary: Pensions ‘unsustainable’
2:00 a.m. August 14, 2009

- Ten years and two months ago, the board of the California Public Employees Retirement System committed what amounted to an act of civic arson. It recommended that the Legislature and Gov. Gray Davis sharply increase the pension benefits for more than 800,000 state employees and retirees.

CalPERS officials said the massive benefits spike would cost taxpayers little or no money because the heavy returns the pension giant enjoyed on its portfolio were likely to remain the norm. Incredibly, the Legislature and Davis believed this absurdly rosy scenario. Nearly all local agencies followed the state's lead in sharply increasing pensions.

Now, with CalPERS' portfolio in tatters and with practically every last government pension provider struggling desperately to cover the cost of benefits, CalPERS' actuary is finally conceding what its board members and top executives can't bring themselves to say: The pension status quo has to die.

Ron Seeling said at a Sacramento forum that CalPERS and its member agencies were facing decades of “unsustainable pension costs of between 25 percent of pay for a miscellaneous plan (covering general employees) and 40 to 50 percent of pay for (police and firefighters) ... . We've got to find some other solutions.â€