CALPERS has about one trillion in unfunded liabilities. CalSTRS has over $400 million in unfunded liabilities. The State health plan has over $400 million in unfunded liabilities. At the same time the State is raising taxes, has tens of billions of deficits—and about lose billions from the Feds for violating the law on immigration, racism, sexual grooming and more. The DOOM LOOP spiral has accelerated. Now we find local counties, also in deficit have pension problems, like San Luis Obispo.
“San Luis Obispo County’s unfunded pension liability topped $1 billion last year, up from $942 million the previous year, according to the SLO County Pension Trust’s 2024 Actuarial Report. The unfunded pension liability represents the difference between what the county expects to owe its retired employees in pension benefits and what it has in assets.
This $65.6 million increase — slightly larger than previous year’s increase — was caused primarily by larger-than-expected salary increases and retiree benefits, a higher-than-expected increase in cost of living and retirees simply living longer than anticipated, thereby increasing the amount of pension payments the trust was responsible for paying out last year.”
Excuses, excuses. Little good news for the California families and businesses. Anyone have the number for U-Haul?
LOCAL SLO County’s pension trust debt passed $1 billion in 2024. How will it be paid?
By Chloe Shrager, San Luis Obispo Tribune, 4/10/25 https://www.sanluisobispo.com/news/local/article303863301.html#storylink=cpy
San Luis Obispo County’s unfunded pension liability topped $1 billion last year, up from $942 million the previous year, according to the SLO County Pension Trust’s 2024 Actuarial Report. The unfunded pension liability represents the difference between what the county expects to owe its retired employees in pension benefits and what it has in assets.
This $65.6 million increase — slightly larger than previous year’s increase — was caused primarily by larger-than-expected salary increases and retiree benefits, a higher-than-expected increase in cost of living and retirees simply living longer than anticipated, thereby increasing the amount of pension payments the trust was responsible for paying out last year.
However, the unfunded pension liability is not totally out of the ordinary, executive director of the SLO County Pension Trust Katie Girardi told The Tribune. “The 2024 liability increase was not a surprise,” Girardi said in an email. “The increase of the (unfunded pension liability) from $943M to $1.008B was anticipated and discussed openly with the board.” Having a large portion of the pension trust unfunded is nothing new for the county.
The funded ratio of the pension trust has consistently decreased over the last near-decade from 76.7% in 2015 to 63.9% in 2024, according to the actuarial report. But Girardi said balancing the trust is a marathon, not a sprint. “The unfunded liability is a long-term obligation that is not due today,” Girardi explained. Instead, it is due over a 20-year period, and the county has an annual contribution plan in place to pay down the liability and fully fund the pension trust by 2041, Girardi said. San Luis Obispo County’s unfunded pension liability topped $1 billion in 2024, but the county has a plan to fully fund the trust by 2041. San Luis Obispo County Pension Trust This plan was already in place last year, when the county faced a similar situation. “We’re slowly eating away at that unfunded liability by having more assets in the plan than we do liabilities,” Girardi said in an interview.
The amount by which the unfunded pension liability grows every year is becoming smaller, and in the coming years those numbers will begin to show “improvement rather than deterioration,” Girardi said. The funded ratio of the pension debt is expected to increase from 63.9% in 2024 to 65.0% in 2025, but all future projections depend on the county’s assumptions about the pension meeting reality, which last year, they did not. To those who wonder what this means for their retirement benefits, Girardi said not to fear.
“Your pension is secure,” she said. “The county’s pension obligations are a legal promise, and (the San Luis Obispo County Pension Trust) is structured to meet those promises not just today, but long into the future.” What is the SLO County Pension Trust? Started in 1958, the SLO County Pension Trust is a fund that both the county and its employees contribute to in order to receive a pension upon and throughout retirement.
How much a retired employee earns in benefits depends on factors like when they were hired, how long they worked at the county and age at retirement. The pension trust currently serves a total of over 7,000 active, retired and deferred employees, Girardi said. In 2023, the trust paid out $135 million to about 3,400 retirees, which averaged to $3,500 a month, or $42,000 annually, she said. The numbers for 2024 are not yet available, Girardi said. The trust is maintained by contributions from the county, its employees and investments into stocks, bonds and mutual funds. As such, the trust currently has a required contribution rate of 54.71% — which translates to around 54 cents into the pension fund for every dollar earned by a county employee.
Those contribution costs are shared by both the county and its employees, so part of every county employee’s paycheck goes into the pension trust. In 2023, the employer-employee ratio split was about 70-30, respectively, Girardi said. The rest of the pension is funded by revenue from returns on investments. Benefits are also tiered based on when an employee started working, so that those closer to retirement earn more pension benefits than new hires, saving the county money as they dole out pensions. On the current schedule, those hired before 2013 are placed in higher priority tiers, Girardi said. Why is part of the pension trust unfunded? The unfunded actuarial liability represents the gap between the pension trust’s assets and expenses. In 2024, the county’s pension trust had $1.763 billion in assets and $2.771 billion in costs, leaving it with a liability of $1.008 billion, Girardi said.
That means the trust is about two-thirds to way funded. “All California pensions are have an unfunded actuarial liability,” Girardi said. “There’s no two ways about that.” However, she did give that SLO County’s unfunded liability is especially large. “We do have a larger funded liability than maybe some of our neighbors, and that is normally because of the cost of living here is substantially higher than other places within California,” Girardi said. Every year, the pension trust board evaluates factors like cost of living and number of retirees to calculate how much money it needs to contribute to the trust in order to meet its funding plan. Sometimes, however, their assumptions are not fully met, Girardi said. Salaries or the cost of living could increase more than they assumed they would, or more people than anticipated could retire early.
All of these factors contribute to the pension trust’s costs outpacing its contributions. Last year, for example, the county assumed it would only need to increase its cost of living adjustments paid out to retirees by 2.75%, but inflation and market circumstances made it so the adjustments actually needed to be increased by 3%, which is the maximum amount allowed by the pension plan, Girardi said.
Other factors that contributed to the growth in the unfunded portion this year was an increase in county salaries as well as retirees living longer than expected. “$1B is a large amount and no one is arguing that statement,” Girardi said. “However, it’s important to understand that such liabilities are common in pension systems due to their long-term nature.” San Luis Obispo County’s unfunded pension liability topped $1 billion in 2024. In order to fully fund the pension trust by 2041, the county plans to increase its employee and employer contributions over the next few years.
San Luis Obispo County Pension Trust In order to fully fund the pension trust by 2041, the county will be required to increase its contributions over the next few years. Under the plan, the total contribution rate, which is currently 54.7%, will reach the peak of 56.5% in 2027, according to the actuarial report. After 2027, the contribution rate will gradually decrease until 2039, at which point it will sharply drop off as the pension trust approaches its funding goal for full coverage in 2041. “Your benefits are protected, and we are doing the work every day to keep it that way,” Girardi said.
Public pensions are guaranteed by law. The answer is simple. Tax the poor folk and let them eat cake!