A recent study by the Stanford Institute for Economic Policy Research (SIEPR) and California Common Sense (CACS) reported that two dozen city and county governments in California are accountable for $135.7 billion in unfunded pension liabilities Public policy professor Joe Nation and CACS researcher Evan Storms ‘13 co-authored the report, which was released Tuesday.
The report evaluated 24 local government pension systems — excluding the California Public Employees’ Retirement System, the state’s main pension fund — and found that none of the systems is at least 80 percent funded, meaning they are all well below the minimum funding level benchmark.
The study examined a range of pension funds, including smaller systems like the Stanislaus County Employees’ Retirement Association (StanCERA) and larger systems like the Los Angeles County Employees Retirement Association (LACERA).
“Each system substantially understates liabilities and overstates funded ratios,” the report states.
The report’s authors said they focused on government transparency and analyzed 99 percent of the independent public employee pension systems in California.
One of the report’s main objectives was to address how the benefits paid to retired workers vary between systems, and to see how they compare to Governor Jerry Brown’s goal of bringing public sector retirement benefits more in line with those in the private sector, the authors said.
According to the report, the findings on public employee pension systems also correlate to weak investment returns, which add to the unfunded liabilities of many government pension funds examined.