In the late 90’s one party (I’ll call them the mystery party since many people become reflexively defensive if their party is indicted) took control of the governorship and both house of the state legislature. They quietly raised the defined benefit pension formula for public employees from (0.02) to (0.03) x (last year of salary) x (years of service). At first the effect was nothing, but each year a new cohort rolls on to the books. CA Public Employee Retirement Systems (CALPERS) has already gone from surplus to 35% under funded at their assumed annual rate of return of 7.5% (good luck on that one). So far we have about a dozen of the yearly retiree cohorts loaded onto the CALPERS with another 20 or so to go. It’ll only get better, right!
What is your public employee retirement multiplier?