03/28/2024

Prepaying on CalPERS Massive Unfunded Liabilities

Governor Brown wants to prepay the California Public Employees Retirement System (CalPERS) with $6 billion beyond what most had expected.

The source of the funds is the Surplus Money Investment Fund.  Don’t ask me why a state with a $169 billion unrestricted net deficit has some $50 billion in a low interest bearing account with such an odd title.  Perhaps the University of California Chancellor can explain how her system and the state can better pull these things off?

Also, don’t ask me why the timing is so odd.  The Legislature just approved an annual $5.2 billion gas and auto tax increase, and now the Governor has $6 billion for non-road repair expenditures?

Despite these concerns and anxieties, I like the proposal.  It’s about time that the Governor got serious about the state’s spiraling unfunded defined benefit liabilities, but, I would postulate that this proposal needs a little more sizzle to make it an even more interesting opportunity.

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