California controller warns of $72 billion unfunded retiree benefits

California State Controller John Chiang warned on Tuesday of a growing $71.8 billion unfunded liability to cover the state's retiree health and dental benefits.

The cost is up $7.2 billion from 2013, in part due to new mortality assumptions that men live two years longer than previously anticipated and women live up to 1.8 years longer.

The retiree healthcare liability has been a priority for Chiang, who began writing about the issue in 2007 when the unfunded cost was $47.8 billion.

"The price tag associated with providing healthcare to retired state workers has quietly grown to rival or even eclipse the funding gap associated with public pensions," said Chiang in a statement.

"We remain dangerously complacent about a liability that has grown by a stunning $24 billion in just the past eight years. If we continue to do nothing, we will be sowing the seeds of a future crisis."

Chiang proposes an aggressive five-year plan to fully pre-fund retiree healthcare costs, calling for an annual payment of $250 million to $1.7 billion above the current contribution.

The plan does away with the current pay-as-you-go policy, which covers the minimum amount as costs are due, and shifts to a pre-funding model, which covers future retiree healthcare benefits by setting aside money in a dedicated trust, much like state pensions.

Governor Brown's office issued a statement following the Controller's report promising to put forward a plan to address the "substantial and growing" unfunded liability of retiree health care in his budget to the legislature next month.


Looks like "Moonbeam Brown" gotta pull another rabbit out of his @ss again.

Couldn't happen to a finer state. Maybe Polisi, Boxer and Feinstein will donate some of their pilfered loot to help out.

Has all the sane people bailed out of that state yet? Definitely wouldn't want to live in Southern Cal when the unmanipulated reality manifests itself.

And thank the lord for new participants.

Yes, and California is full of them.

Nah, California is full of the recipients, not the donors, hence the title. But not to worry, a lot of the donors are bailing out right and left.

California will soon be a welfare state with so little to rob it will be funny. I highly suggest that anyone that wants handout to move to California, the state with the most giveaways.

He ought to know,learned from the best!

Too bad he didn't learn from the Swiss, could of still had his freedom:

"Springtime: 1995: fifty years after the Shoah, The Israeli press grabs hold of the rumor that the Swiss have plundered the victims of the Holocaust. Seven billion francs still remained in Swiss banks. The polemic had begun... The image of Swiss banks is seriously threatened. Edgar Bronfman, President of the World Jewish Congress and Avraham Burg, President of the Jewish Agency, are received by the banks. American subsidiaries of Swiss banks could experience retaliatory measures. In the United States, Senator Alfonse d'Amato announces the American Senate is going to undertake an investigation. Swiss banks have not yet reacted, draped in their arrogance..."

[Is] "Switzerland, Neutral or Cowardly?" -- when they engage in business with Germany; when they become the bankers for the Reich; when they turn away Jews by the thousands or, when they think up the national reduction. These are the most significant points in the controversy which has been all over the news the last several months.

All because the California people think they are Swiss:

"The populist party which called for the referendum to ban minarets, as the most obvious sign of ‘Islamisation’, now knows that the Swiss people can be divided and scapegoats for the ills of our social system blamed, as a way to avoid changing the really key elements of that system. In this sense too, democracy is weakened, because democracy can only really proceed from a correct understanding of, for want of a better phrase, how things work. This is one of the key problems with a democracy based on capitalism."

Something Californians have know long before the Swiss took this action in 2009.

now you have become an Expert on Switzerland too?
How quaint!
And you still don't know Phlock about it!

Besides,we have considerably more Parties than a mere two involved in the political process!
Something you Guys could use,if you ever get around to it!

With my ability to research, I can know whatever I want to know. With my lack of emotion, I am able to look at all sides equally. And from that form a perception not based on what I want to be true, but what I find to be true.

And with your propensity to have a perception based on your emotions (as Anonymous so oft says), expect me.

Now to the meat, for some reason you believe you have some right to disparage the US, well then I then have the right to bring forward actual true info on the Swiss, especially those illustrious Swiss banks that make the Rothschilds and Warburgs look like paupers.

But it is so nice to see your emotional outburst.

But to remain on topic, thanks for the confirmation of being right on about the similarities between California and the Swiss.