Another is that monetary policy has made fixed income securities a low yield investment. Funds need to diversify and add risk.
Another reason is that folks writing these things assume workers work a full career. The reality today is that many government workers start in their 30s and 40s, and only get the rich benefits if they work until their late 60s. That neutralizes the problem, as they will be dead sooner.
Personally, I think the WSJ and other anti-pension people overplay the liability. The drivers of pension expenses are police and firefighters, and these (mostly) guys tend to die young.
They also tend to report on the problem in masse, while it varies from outright disaster (Illinois) to Oregon, which is overfunded.
How is this possible? The state that he lives in hasn't changed the rules for vesting/collection? That seems like an absurd amount of money for what I'm assuming is a career that's lasted less than 30 years.
If you join at 18, at 50 you'll have 32 years, which in many departments means seniority to get alot of overtime. It's a decision that the municipality makes -- they understaff to preserve cash and dump the longer-term problem on the bigger pension fund.
The early retirement is important, as the life expectancy for police/fire drops significantly based on retirement age. But the polices re: overtime as it impacts pensions are often too generous. These issues are "fixed" for normal employees in most places -- for example in NY non-public safety employees and teachers have caps (~10%) on how much your salary can increase for pension purposes and either eliminate or cap how overtime applies.
My wife worked for a public employer who had a way to let overtime go into an optional 401k-type plan at a higher rate so that blue collar employees would have an easier time retiring on time. (Many blue collar folks basically depend on OT)
Another way of saying it: rich people were unhappy they have to pay taxes.
Another way of saying it: I don't think your summary is particularly fair or accurate.
https://ballotpedia.org/Article_XIII_A,_California_Constitut...
3 is arguable. They usually look for 7%
I'm quite satisfied with my subscription.
S&P went from 1565 Oct 07 2007 to 735.09 Feb 27 2009.
We're now up to 2818 but if we had delivered 8% since october 07 we'd be at 3649 by this Oct 5. So we're 28% short!
If you use S&P peak in 2000 it's 1552 and to deliver 8% since then we'd need to be at 6209!!!
Catching back up to steady state growth, especially after a 50% loss, is unfathomably hard!
What makes it worse is that the present value of obligations skyrocketed as interest rates went to 0. In 07 the Fed Funds rate was 4.5% and it's currently 2%. This rate was 0.25% until the end of 2015. For a payout of $50k per year for 10 years, ten years in the future, the present value is $481,031 at 0.25%, $368,442 at 2%, and $254,761 at 4.5%.
So the current obligation is 44% higher than it was in 07 and the amount of money is 28% lower than expected. And this is AFTER the S&P has had an incredible run from 735 to 2818!
It cost Rupert Murdoch some part of $5billion when he bought Dow Jones for that price.