One thought on Thursday’s pension forum in Santa Rosa: There was some discussion about whether this pension crisis is primarily a problem of investment performance, one that will be rectified as the stock market recovers.
What many seem to forget is that newspapers, including us, were writing about unfunded liabilities and runaway costs of retirement benefits back in 2006, well before the bubble burst.
Furthermore, David Crane, the former econmic adviser for Gov. Arnold Schwarzenegger, now a lecturer in the Public Policy Program at Stanford University, recently blogged that pension funds “need the Dow to be over 29,000 now — more than twice its current level — in order to meet the return guaranteed from 2000-2012.”
He projects that the Dow would now have to be over 29,000 now to meet the return guaranteed from 2000-2012.
In order to meet the giveaways and pension guarantees the state made in 1999, “by 2016 — just four years from now – the Dow needs to triple,” he wrote.
Again, it could happen. But I wouldn’t bank on it.
— Paul Gullixson