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We’ve known for more than 25 years that the government employee Pension crisis would be a disaster because of the various gimmicks built into it, and through all of the unsustainable excessive and unfunded promises made which will have to be borne by the taxpayers.
- GASB (the federal Governmental Accounting Standards Board) announced changes in accounting standards that because of greater transparency, disclosure and “sunshine” will very likely darken the pension picture for most agencies. Local governments must report BILLIONS in PENSION DEBT previously buried in footnotes rather than being reflected on the actual Financial Statements.
- “GASB voted to approve two new standards that will substantially improve the accounting and financial reporting of public employee pensions by state and local governments.”
- “The new standards will improve the way state and local governments report their pension liabilities and expenses, resulting in a more faithful representation of the full impact of these obligations,” said GASB Chairman Robert H. Attmore.
This is a welcome change!
The system must be reformed to ensure greater certainty to retirees and greater fairness to taxpayers; otherwise, circumstances MAY FORCE a disastrous BANKRUPTCY which can wipe out most contracts.
Currently, pensions are funded are about 70% of what is required and there is an expected DEFICIENCY of about $550 BILLION for CA state government employees.
The taxpayer is being made responsible for this $550 BILLION PENSION DEFICIT, which consists of above average pension payouts, and with most taxpayers having ZERO pensions.
To put in perspective California’s budget is about $92-95 BILLION.
If you thought raising taxes to generate $10 BILLION “for education” which would go primarily to fund pensions was tough, wait till further reality hits, unless the various pension systems are reformed.
The County of Orange has about $4 Billion in unfunded Pension and medical liabilities. To put in perspective, Orange County’s budget is about $3.5 Billion.
The federal government has about $66 TRILLION of TOTAL UNFUNDED LIABILITIES. (about $50 Trillion consists of Medicare and Social Security).
To put into perspective, the Annual Federal budget is about $3.5 TRILLION (a record high). Our total annual US Economy is about $14.5 Trillion.
- Other deficiencies exist in the various districts, agencies, and city governments.
- Additionally, taxpayers face billions in unfunded liabilities for the Pension Benefit Guaranty Corporation, which covers retirement plans at failed companies.
We have pension/retirement deficits at various levels: Federal, State, County, City government and other local districts and agencies.
And yet we continue to act as if we have unlimited supply of taxpayers with excess money laying around.
We must act ! :
CLICK HERE for “Deficit Reduction and Infrastructure Investments for America“
CLICK HERE for “Debt & Sacrifice In America: Should 1% = 1%?”
CLICK HERE FOR PRESS RELEASE from GASB – “GASB Improves Pension Accounting and Financial Reporting Standards” of June 25, 2012.