Tag: OPEBs

Our Most Expensive Failure

Mary Pat Campbell

Link: https://www.governforcalifornia.org/news/2023/12/1/our-most-expensive-failure

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When launching GFC in 2011 it was my hope that we would see meaningful pension reform by 2020, but we have failed to achieve that objective and the negative consequences for public services and taxpayers have been enormous. As evidence, just look at the four-fold explosion in annual pension spending by the Los Angeles Unified School District this year compared to ten years ago:

Pension spending will keep exploding. That’s because California’s public pension funds still have inadequate ratios of assets to liabilities despite more than $200 billion of pension contributions and a doubling of the stock market since 2013-14.

Pension reform is not the only thing I got wrong. I thought it would be even easier to terminate California’s unnecessary spending on other post-employment benefits (OPEB), especially after the creation of Obamacare and that program’s generous federal healthcare subsidies, but LAUSD alone is spending $365 million on OPEB this school year. Together, pensions and OPEB consume one of every six LAUSD dollars, leaving that much less for classrooms and salaries. 

Author(s): David Crane

Publication Date: 1 Dec 2023

Publication Site: Govern for California

NJ OPEB Update – 2020

Mary Pat Campbell

Link: https://burypensions.wordpress.com/2022/04/26/nj-opeb-update-2020/

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There are three separate reports for state, local government, and local education which throw a lot of distracting numbers at you but, when added up, show that after an amazing 1/3rd reduction in the total OPEB Liability (from $110 billion as of 6/30/16 to under $74 billion as of 6/30/19) the state actuaries sharply reversed course.

Author(s): John Bury

Publication Date: 26 Apr 2022

Publication Site: Burypensions

Will the OPEB Ostriches Ever Run Out of Excuses?

Mary Pat Campbell

Link:https://www.governing.com/finance/will-the-opeb-ostriches-ever-run-out-of-excuses

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As one stalwart finance officer once told me, “Our pension funds basically sucked up all the new revenue we’d been hoping to set aside to properly fund OPEB.” Those and other priorities for spending each incremental revenue dollar continued to crowd out the opportunity to institute consistent actuarial funding for OPEB benefits; the path of least resistance for policymakers who lack foresight and a sense of fiscal responsibility has been to keep kicking the can.

So it is that between 2015 and 2019, the state and local sector had clearly sorted itself into three classes of employers: (1) those who had trimmed or modified their OPEB commitments and liabilities to sustainable levels, (2) those who had begun actuarial funding of an OPEB trust fund, and (3) those doing nothing and leaving the problem to their successors and future taxpayers.

Author(s): Girard Miller

Publication Date: 18 Jan 2022

Publication Site: Governing

Financial State of the States 2021

Mary Pat Campbell

Link:https://www.truthinaccounting.org/news/detail/financial-state-of-the-states-2021

Full PDF: https://www.truthinaccounting.org/library/doclib/FSOS-Booklet-2021.pdf

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Unfunded retirement liabilities
are the largest contributing factor
to the $1.5 trillion in state-level
debt. One of the ways states make
their budgets look balanced is
by shortchanging public pension
and OPEB funds. This practice
has resulted in a $926.3 billion
shortfall in pension funds and a
$638.7 billion shortfall in OPEB
funds

Author(s): Truth in Accounting

Publication Date: September 2021

Publication Site: Truth in Accounting