Pension Fund Woes

California Pension Fund Threatens to Renege on its Promises for the First Time (Pension Woes)

When a small town decides that it wants to withdraw from Calpers, the big California pension fund, it finds out it owes $1.6M to exit because Calpers used realistic assumptions, including no new money coming into the city share of the pension fund.

The city thought they were nearly fully funded as they had been paying into Calpers for many years. Surprise! They get a bill from Calpers for $1.6M.

The problem besetting municipalities across the country is that public pension authorities have been assuming unrealistic discount rates and rates of return on their investments for decades. 

It's time for Texas municipalities, including Georgetown, to require TMRS to use real-world discount rates and investment return rates when assessing the health of the fund.