Stanford report warns of crippling pension costs

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Yet another group of analysts has taken a look at the retirement benefits granted state government workers and determined they are creating a major financial problem for taxpayers. In a report titled ‘Going for Broke: Reforming California’s Public Employee Pension Systems,’ a group of graduate students at Stanford University’s Institute for Economic Policy Research determined that California pension systems have promised half a trillion dollars more in benefits than they will have the funds to pay over the next 16 years.

The report was prepared for Gov. Arnold Schwarzenegger, whose efforts to curb the state’s pension costs have gained little traction in Sacramento.

The report’s release was followed by a statement from Schwarzenegger. ‘The consequences are clear: Increasingly large portions of state funding for programs Californians hold dear such as schools, parks and healthcare will be diverted to pay for this debt,’ he said.

-- Evan Halper