City of L.A. to Cut Investment Projections—Add $175 Million to $10 billion Unfunded Liability

The bad news is that the City of Los Angeles has a $10 billion unfunded pension system.  The worse news is that due to its management, that goes up by at least $175 million this year—could be worse.

“Expected yearly earnings were cut from 7.5% to 7.25% following a unanimous vote by the City Employees’ Retirement System board. That will shift $38 million in retirement costs to the general fund budget.

It couldn’t come at a worse time. Earlier this year, the Los Angeles Fire and Police Pensions board, cut its assumed annual rate of return from 7.5% to 7.25%. Together, these two decisions will add $170 million in retirement costs to next year’s budget, analysts say.

How many cops will not be replaced when they retire?  How many library hours will be cut back?  How many more potholes not filled?  These are just some of the results of the pension crisis for Los Angeles—and your city?

Photo courtesy of Eric Garcetti, Flickr.

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L.A. Pension Board Cuts Investment Projections

California City News, 09/28/2017

The board that oversees pension benefits for thousands of workers in the City of Los Angeles reduced its projected rate of return Tuesday in a move that will further strain the city’s general budget.

Expected yearly earnings were cut from 7.5% to 7.25% following a unanimous vote by the City Employees’ Retirement System board. That will shift $38 million in retirement costs to the general fund budget.

It couldn’t come at a worse time. Earlier this year, the Los Angeles Fire and Police Pensions board, cut its assumed annual rate of return from 7.5% to 7.25%. Together, these two decisions will add $170 million in retirement costs to next year’s budget, analysts say.

What will it all mean for Los Angeles? Read the full story at the L.A. Times.

 

About Stephen Frank

Stephen Frank is the publisher and editor of California Political News and Views. He speaks all over California and appears as a guest on several radio shows each week. He has also served as a guest host on radio talk shows. He is a fulltime political consultant.