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.