CA CAFR: pensions cost $27 billion, only 4% comes from the $600B ‘pension fund’

California’s 2011 Comprehensive Annual Financial Report (CAFR) shows a surplus of taxpayer assets of $600 billion dollars in cash and investments. The designation of $460 billion of this is for funding pensions, and listed on page 83. Pages 234-235 documents pension distributions to beneficiaries with other costs totaling $27 billion. Since people assume the retained assets are to help fund pensions, let’s look how much of California’s $27 billion in pension payments is contributed by this $600 billion fund:

  • California taxpayers (“Employer”) paid $12 billion as “contributions,” and plan members paid $7 billion (pgs 234-235).
  • Pages 234-235 show the “pension fund” produced $10 billion of income, and cost $3 billion in expense (Wall Street investors). Because part of the investment strategy is buying $92 billion of debt securities to earn interest while also keeping $164 billion in state debt, I’ll subtract the $6 billion interest cost (page 107). Therefore state investment income minus debt interest cost equals ~$1 billion in income to fund pensions.
  • So this means that the state’s alleged pension fund produces just 1/27th (4%) of pension funding. Taxpayers fund 19/20ths (95%) of the public funding from their pockets with additional taxes (plan members fund $7 billion).

But 2011 is actually a more productive year than the negative average of the last four years. That means since 2008 Californians have not only had $600 billion of their assets retained, but had to pay to not have $50,000 per household.

If you’re wondering, the income the state generated for your $50,000 between 2002 and 2007 averaged a token 2% return.

So if this “pension fund” doesn’t fund pensions, what does it do? Pages 234-235 show almost three times the pension net income goes to the fund’s management (investment expense).

Given the evidence of a “1%” that uses cartels to transfer the 99%’s wealth to them, is it so hard to imagine the same government structure that allows this transfer nationally exists within state government?

Given the evidence of a “1%” who refuse to end poverty despite the investment being less than 1% of gross national income, is it so hard to imagine these same personalities would extent poverty and austerity as domestic policy?

At least the states aren’t engaged in Orwellian unlawful War Crimes. But if you notice, no state “leadership” of either party ever say a word that their national party “leadership” are War Criminals. And neither will the 1% corporate media.

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