Monday, August 3, 2009

Pension Reform in California

California has always been a bell weather state for most trends that travel across North America.

The pension crisis is a new trend where California has become the leader. California is the largest state and its pension funds are the biggest in the country. The population in California population is larger than Canada.

The public sector pensions in California are melting down and it has become a crisis. The Governor is needing to look at changes to the system as he is faced with a $63 Billion unfunded liability. It is a challenge all governments in Canada and the US are watching.

Several groups have begun lobbying against what are overly generous and unsustainable pensions for the public sector. One of those groups is the California Foundation for Fiscal Responsibility. Here is an excellent radio interview with the President.

Part of the problem with the pension crisis is that the pensions paid to the public sector over shadow those paid in the private sector. Thousands of retirees have annual pension income in excess of $100,000 per year. The gap between compensation paid to the public sector and private sector has widened dramatically. One group has focused on both these issues,

In California some of the fuel to the fire has been the release of the actual earnings of pensioners. Canada faces the same challenges as California. Many pensions paid in Canada are excessive. One pension identified in BC is paid in excess of $270,000 per year. The disclosure of pension income is needed in Canada as well.

All governments across North America are watching with anticipation the developments in California.

No comments:

Post a Comment