Unfunded pension liabilities, up by 24 billion in 2015

Medium: Annual reports just issued by California’s two largest public pension funds indicate that the state added roughly $24 billion of unfunded public pension liability in fiscal year 2015.

In December, California’s two principal pension funds, CalPERS and CalSTRS, posted online annual reports for the most recently completed fiscal year, which ended June 30, 2015. Traditionally, those pension funds have employed an 18-month information lag about unfunded liabilities (UAAL’s), the amount by which pension liabilities exceed pension assets and the measure that most affects citizens. That’s because UAAL’s + interest = cuts to public services, tax increases, or both.

But fortunately, a new schedule mandated by the Governmental Accounting Standards Board (GASB) requires pension funds to update a measure known as the “Net Pension Liability” (NPL) as of the current fiscal year end. Because the NPL bears a relationship to the UAAL, observers can gain a sense of how the UAAL changed over the same period.

This happes in  a flat year for the market because of lowered returns.  2016 will be worse and California politicians will be scrambling to raise taxes everywhere.