S. public pension funds' unfunded pension liabilities are expected to rise through 2020, even under positive investment return scenarios, said a report Tuesday from Moody's Investors Service.
In its report, Moody's ran a sample of 56 plans with $778 billion in aggregate reported net pension liabilities through three different investment return scenarios. Due to reporting lags, most 2019 pension results appear in governments' 2020 financial reporting, Moody's noted. The plans had $1.977 trillion in trillion assets.
Under the first scenario with a cumulative investment return of 25% for 2017-'19, aggregate net pension liabilities for the 56 plans fell by just 1%. Under the second scenario with a cumulative investment return of 19% for 2017-2019, net pension liabilities rose by 15%. Under the third scenario with a 7.2% return in 2017, -5% return in 2018 and zero return in 2019, net pension liabilities rose by 59%.
A class-action lawsuit against CalPERS filed on behalf of more than 130,000 California government workers and retirees can move forward to trial, a Los Angeles judge has ruled. The lawsuit challenges a sharp increase in fees that the California Public Employees’ Retirement System levied on people who bought insurance for long-term health care through the pension fund. It argues that the rate hike was different in scale and purpose than any previous fee increase on those policy holders.
Should taxpayers underwrite special benefits to attract new teachers, such as affordable housing, expanded maternity leave and tax breaks? California lawmakers have put forward a raft of proposals offering extra perks for teachers this session, prompted by what supporters say is an urgent need to do more to encourage people to get into the profession or stay there. “Due to the extreme shortage of teachers in the state, many school districts must seek opportunities to attract qualified teachers,” Assemblyman Kevin Mullin, D-South San Francisco, said of his bill meant to increase the supply of affordable housing for teachers. Available data, though, doesn’t back up such dire assessments of the state’s overall teacher supply. Data shows that, as state finances have improved, so have the number of teachers in public schools.
The California High-Speed Rail Authority promises to “achieve net zero greenhouse gas (GHG) emissions in construction” and is committed to operate the system on “100% renewable energy” by contracting for “400 to 600 megawatts of renewable power”. These promises may please environmentalists, but they cannot be kept.
Two changes to the contract – added without bidding – swelled the deal to $8 million within a year. Then, the Employment Development Department submitted a request to add another $2 million worth of work to the arrangement without soliciting new bids from other companies. That project is one of nine that State Auditor Elaine Howle highlighted in a new report released on Tuesday that urges California government to be more cautious in awarding high-value contracts without seeking competitive bids.