Last week I wrote Pension Reform In California about pensions reform in California. What happens in California will have an impact on pensions across North America.
On Thursday in the Los Angeles Times there was an article called Why did Schwarzenegger bail on pension reform? The article speaks about Schwarzenegger backing out of a commitment he made to reforming pensions in California.
In the LA Times article, two advocates for pension reform address the issue. The first is an analyst with American Federation of State, County and Municipal Employees. The secound perspective is countered by the head of California Foundation for Fiscal Responsibility. The article makes for interesting reading.
On Friday there was a follow-up article called CalPERS: a looming disaster? This article once again features the perspective on the two sides in the previous article. It addresses the huge shortfalls of Calpers, the largest California public sector pension fund.
Almost all public sector employees defined benefit pensions are suffering serious shortfalls and are perceived to be overly generous.
The articles together do a good job of describing in a comprehensive way the main issues surrounding pension reform. Pensions reform is coming to North America and the battle is on to see what it will look like in its final form.
One interesting note to keep in mind when you read these articles is that Calpers covers 1.6 million members and has accumulated $191Billion. In Ontario the biggest pension plan is Ontario Teachers and at the end of last year they had over $110 Billion but only had 284,000 members. Calculate the average amount of assets per member for each plan. You will see how generous Ontario taxpayers have been funding public sector pensions.
Dig deep and keep working there is lots more to pay!
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