PROBING CALPERS PENSIONS LAWMAKER SAYS TOTAL TAB TO HIT STATE HARD.
As concern grows throughout California about the bills for public retirees' pensions and benefits, the state Legislative Analyst's Office is researching what the total tab will be, officials said Monday.
The Daily News recently reported that taxpayers statewide are on the hook for at least $110 billion in the years to come for public retiree pensions, health care and workers' compensation costs.
Assemblyman Keith Richman, R-Granada Hills, said it's very important that the nonpartisan LAO, one of the most respected agencies in Sacramento, turn its attention to these debts.
``These tens of billions or hundreds of billions of dollars in unfunded pension liabilities we are passing onto our children and grandchildren are going to severely impact California's future,'' Richman said in a phone interview.
``They are going to impact our ability to invest in education, higher education, infrastructure and affect our ability to compete in a global economy.''
Marcia Fritz, a former CalPERS consultant who has worked on pension reform proposals with Richman, predicted the debts would ultimately hurt the state's bond ratings.
``One thing agencies didn't anticipate or put into their formulas when they reduced retirement ages in 1999 was that they were also going to be increasing post-retirement health benefit costs,'' Fritz said. ``California will be hit hardest of any other state because of this.''
Jason F. Dickerson, a senior fiscal and policy analyst, said the LAO is conducting its own survey of the liabilities.
New Governmental Accounting Standards Board guidelines that take effect next year require public agencies to list their unfunded liabilities in their annual financial statements.
``This is something that requires governments to start thinking about this topic in a way they haven't previously,'' Dickerson said. ``Local governments are already engaged in understanding what this will mean and a number are already hiring actuaries to perform valuations of their liabilities.''
Public employee pensions in California - the richest in the nation - have become so generous that some workers can retire at age 50 with more than 100 percent of their final year's salary; thousands of public employees statewide earn annual pensions exceeding $100,000.
Last month, Fritz, now a Citrus Heights certified public accountant, claimed that state pension officials gave misleading information to local governments statewide that led to huge increases in pensions for public employees.
She alleged that changes in GASB guidelines a decade ago set the stage for California's ballooning pension liabilities by allowing officials to obscure the long-term costs.
Although elected officials ultimately approve pension increases, Fritz maintained their decisions were influenced by projections prepared by CalPERS actuaries.
Those projections are not audited by independent third parties to ensure they are prepared in accordance with governmental accounting standards, that payroll data is accurate and that actuaries adopt rational funding policies that are free from political influence, Fritz said.
Richman is considering requesting a state audit of CalPERS to ``bring to light some of the fundamental issues surrounding CalPERS operations and liabilities,'' said Daniel P. Ellissier, Richman's chief of staff.
``Like any public institution or any publicly traded company, an independent audit of the entity is very important in conveying financial transparency,'' Richman said. ``I do think it's very important that an independent audit of CalPERS is done in order for the public to have a complete understanding.''
Edward Fong, a CalPERS spokesman, said CalPERS' financial statements were independently audited every year and submitted to the Legislature.
``They are also available on our Web site for public review,'' Fong said.
Jon Coupal, president of the Howard Jarvis Taxpayers Association, said he supports an audit of CalPERS.
``If they are actively soliciting local governments or the state government to increase benefits then that is not a proper function of CalPERS,'' Coupal said.
Troy Anderson, (213) 974-8985
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|Publication:||Daily News (Los Angeles, CA)|
|Date:||Nov 15, 2005|
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