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The California State Retirement Plan – “Unsustainable”

state retirement planSometimes nothing can be quite so damning as the truth spoken by those in the know. So it is with the political time bomb that is public employee pensions and healthcare. Beneficiaries in all states should be nervous but especially those vested in a California state retirement plan. Let’s listen in on the desperate conversation.

Former California Assembly Speaker Willie Brown, super-liberal, wrote this in the San Francisco Examiner:

“The deal used to be that civil servants were paid less than private sector workers in exchange for an understanding that they had job security fir life. But politicians – pushed by our friends in labor – gradually expanded pay and benefits…while keeping the job protections and layering on incredibly generous retirement packages…This is politically unpopular and potentially even career suicide…but at some point, someone is going to have to get honest about the fact.”

And Democratic state Treasurer Bill Lockyear pointed out the Catch-22 nature of the state retirement plan situation at a legislative hearing:

“It’s impossible for this Legislature to reform the pension system, and it we don’t it will bankrupt the state.”

Oh crap – impossible to fix but will ruin the state budget. That sounds like a financial death sentence for public pensioneers in the near future.

And then there’s the chief actuary for the California Public Employees Pension System who contributes his opinion to the discussion that the current pension system is “unsustainable.”

Sounds to us like state retirement plan workers should busy themselves developing alternate plans of retirement funding. Don’t look so grim though. There is an answer and it’s income investment properties. Works better than the yucky old stock market anyway.

The Heroic Investing Team


Flickr / baileyraeweaver