Last year CalPERS reported that the city of Fullerton is facing an unfunded pension liability of $37,531,831 on our public safety employees’ retirement plan. That’s the amount that we currently owe our public servants above and beyond all future budgeted payments.
Of course, many professional actuarials believe that CalPERS’ figures are purposefully understated. They’re just being nice. What we’ve learned over the last few years is that CalPERS and the unions have been feeding our politicians a big fat load of lies, which were used to pump up their pensions. The figures are derived from proven unrealistic investment returns that can never be achieved. Studies conducted by Stanford grads and the NCPA agree.
So we asked an industry insider to recalculate Fullerton’s unfunded pension liability using a realistic rate of return for a government pension system. While he could not do a detailed actuarial report for our city, he stated that using a more realistic 5% long-term rate of return “would raise the unfunded liability by somewhere between 60% to 120% in most pension systems.”
Based on those figures, it’s safe to say that Fullerton’s real unfunded pension liability is somewhere between $60,000,000 and $83,000,000. That’s just for the police and fire unions, which has about 250 currently employed members.
Wrap your head around that. Sixty million dollars of unfunded, unplanned debt just for our little city of Fullerton. That money will not be spent on roads, parks, infrastructure, libraries or public safety. It will be given away to retired public employees, long after they’ve stopped serving our city.
If we don’t do something about it now, it’s going to get worse.
#1 by Jonny C. Lately on September 2, 2010
Don’t forget to add in all of those bonds passed by the redevelopment dimwitts a.k.a. the council.
#2 by Johnny Donut on September 2, 2010
I knew it was a big number, but that’s just absurd. Maybe the cops and firefighters can stand out in front of Stater Bros and beg for donations.
Nah, it’s easier just to take it from taxpayers.
#3 by FPOA on September 2, 2010
Can I get an advance? I need another pair of See-Doos.
#4 by I'm not worried on September 2, 2010
Obama will save us.
#5 by Sam on September 2, 2010
That’s only $2,000 per family. C’mon guys. Everyone dig deep and we can nip this thing right now so our public servants can retire with the plentiful lifestyles that they deserve.
#6 by van get it da artiste on September 2, 2010
thank God for steven greenhut, the man who has written the latest informative book on pension tyranny
#7 by Dahspunks on September 2, 2010
The Truth about that MFer Jim Armstrong misleading the Clowncel is out. What was that famous quote from Julie Sa? “Jimma, howa I sapose to vota ona dis one?”
#8 by Ling Cod on September 2, 2010
Ok, what can we do about it?
#9 by Larry Teeters on September 2, 2010
pitch forks are not the answer, maybe a “buy out” would work, sell tax free municipal bonds to payoff (negotiate a net present value of the retirement benefit) the retired public employees that would infuse a ton of cash into our sputtering economy and jump start the road to recovery, just a thought. And for god sakes end the 3 @ 50.
#10 by Travis on September 2, 2010
A buyout would be incredibly expensive. $60 million is just the unfunded portion. The entire commitment over the next 30 years is hundreds of millions of dollars.
Ending 3 @ 50 is not enough either. It would just come back next time the stock market gets hot and CalPERS re-cooks the books. The trick is to get out of defined benefit plans altogether like every still-functioning business in the U.S. has.
#11 by Travis on September 2, 2010
It’s also important to note that this number is ONLY for the public safety unions. It does not include:
Fullerton Municipal Employees
Fullerton School District
Fullerton Joint Union High School District
Those are all underfunded as well, although not as much because they didn’t get 3@50.
#12 by Anonymous on September 2, 2010
Know what is sad…some are trying to find work and the bureaucrats keeping worrying about their retirements instead of ours.
It is very upsetting to see $60 M of something that the employees should be responsible for…not the taxpayers.
Very upsetting! Get rid of that bald head guy Bankhead….Double dipper!
#13 by What's the Beef on September 2, 2010
Wasn’t Shawn Nelson supposed to save us by killing public pensions? Oh, that’s right. He’s too busy taking a fat pension for himself.
#14 by Travis on September 3, 2010
The municipal employee plan is only underfunded by $8.5 million (CalPERS calculation) because Nelson blew the whistle before they could boost it. So I guess he did save us something.
#15 by Anonymous on September 3, 2010
The calculation that the industry insider performed is true if and only if the assets that CalPERS invests on behalf of the City earn 5% over the life of the pension plan, which could be a long, long time. That would imply equities and alternative investments fail to earn what they have been giving over the last 100 years or so. Now that is entirely possible, but if true, what does that say about our economy and prospective growth going forward? It means that we have much larger problems going ahead of us. All those “great” defined contribution plans will not yield nearly enough to sustain retirement income for most of society. Who’s going to take care of those folks?
#16 by Bleed the Freak on September 3, 2010
Whistle blowing my ass. The only thing being blown is him by all you kool aid drinkers. Slurp it up boys. There won’t be much left for all of you after November.
#17 by Joe Sipowicz on September 4, 2010
Nelson by at least 30 points.
Sidhu: no substance to sell, and no willing buyers. And this time there won’t even be any union juice: the cops are busted and Berardino is smoking stogies with Nelson.
You’ll be bleeding freaky bad the first week in November. And Assclown Sidhu’s pathetic political career will sink into the sunset.
#18 by Lou Filliger on September 4, 2010
Actuaries is the noun. Actuarial is an adjective. “Many professional actuaries believe that CalPERS”….
Signed, a professional actuary who’s tired of being referred to as an actuarial. We don’t refer to the governor as a gubernatorial, do we?
#19 by Johnny Donut on September 4, 2010
Do actuaries have a hard time making friends?
#20 by Bleed the Freak on September 5, 2010
Jo-Jo,
I think you’re smoking some of that whacky tobacky at your Grover Cleveland meetings. Try getting your hands on one of those care packages your Messiah Nelson is sending to the troops and sober up.
Nelson is a hypocrite and his new car smell is wearing off. The experiment was a bust. You’ll see. Now what is the flavor for today?
#21 by Joe Sipowicz on September 5, 2010
Whatever it might be, the flavor won’t be Seedy Essence of Sidhu. Nobody’s buying that product.
#22 by Joe Sipowicz on September 5, 2010
P.S. I’ve never been to a Grover Cleveland party.
#23 by Bleed the Freak on September 5, 2010
Then you should go to one. They’re fun.
#24 by admin on September 5, 2010
Yeah, like you’ve ever been invited!
#25 by thefullertonwatcher on September 9, 2010
wanna bet
#26 by dogmom on September 7, 2010
Nelson swings with whatever is popular at the time. He is not reliable and lost favor with me a long time ago. HOWEVER, he did take an “unpopular” stance among his council members, on the pension issue. He did save Fullerton some money.
As with all elections, I find myself voting for the lesser of the two evils. I will support Nelson. Travis is right on this one, folks.
#27 by dogmom on September 7, 2010
Back to being productive on the issue. Ling Cod asked “what can we do?”. Some discussion followed. What is actually doable? Pension reform is one of two main issues being addressed to the council candidates for the three open seats. Is this where we start? Is there a way to be more proactive on the issue? How can we fight what has already been contracted? I agree that a buy-out will be too expensive, but I like the flow of ideas. Keep thinking.
#28 by just a guy on September 7, 2010
I agree, let’s map out some real solutions. No more empty platitudes.