The Public Sector Pension Crisis
San Diego and its pension fund face a deficit estimated to be as high as $2 billion, caused by agreements in 1996 and 2002 to increase benefits while allowing the city to pay less into the fund than the retirement system needed.
If some committee of Congress wanted to engage in useful hearings, it would organize an inquiry into the particulars of the San Diego mess as well as attempt to forecast for the country which other state and local governments have contracted themselves into ruinous pension agreements. California is home to the worst of these gold plated fiscal time bombs, but there are many, many other problems across the country.
As of April 24, 2005, the National Association of State Retirement Administrators reported an aggregate unfunded liability of over $264 billion across the 103 systems it surveyed.4 In a separate analysis by Wilshire Associates, the aggregate unfunded liability of state pension systems was estimated at $366 billionin 2003.5 According to the Wilshire study, only two states had pension system assets that exceeded their liabilities and sixteen states had unfunded liabilities larger than their annual state budget.6