Monday, April 5, 2010

Grad Students as Higher Ed Senior Administration-Stanford report: Shortfall for California's pension systems as much as a half a trillion dollars

Thankful for Grad Students taking a stab at it, wondering what the masters of the universe at UCOP have to say?...:

Going For Broke: Reforming California’s Public
Employee Pension Systems
By Howard Bornstein, Stan Markuze, Cameron Percy, Lisha Wang, and Moritz Zander.
Faculty Advisor: Joe Nation

Stanford report: Shortfall for California's pension systems as much as a half a trillion dollars

By Denis C. Theriault

According to a new report by a group of Stanford University graduate students, the shortfall facing California's public pension systems could reach more than half a trillion dollars over the next decade and a half.

A summary of the report, released Monday, also said the current recession has cost the three systems — for the state's public employees, schoolteachers and University of California workers — $109.7 billion in lost investment value. The report says the systems' basic growth assumptions are too rosy.

The report was prepared for Gov. Arnold Schwarzenegger, who has made pension reform a top issue his last year in office. Because pension benefits are guaranteed, the state's general fund, facing a $19 billion deficit through next summer, must make up any shortfalls.

"This study reinforces the immediate need to address our staggering pension debt," the governor said in a statement. "The consequences are clear: increasingly large portions of state funding for programs Californians hold dear such as schools, parks and health care will be diverted to pay for this debt."

The report's proposed changes echo the governor's, many of which are politically difficult: reducing benefits for new employees, raising annual contributions to ward off shortfalls and shifting workers to a partial 401k system. High pension costs also are a growing concern for California's cities and counties, as well as for other states.

To read
Posted: 04/05/2010 06:57:00 PM PDT
Updated: 04/05/2010 06:57:02 PM PDT

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