Top Headline Comments 3-15-11 | Main | I never want to hear about "The Pet Goat" again [Fritzworth]
March 15, 2011

California, Where Being Boned Is A Way of Life!

One of the major downsides to a large welfare state full of unfunded ("pay as you go") entitlements is that actuarial mistakes can really bite you in the ass. In this case, California's bill for retiree health and dental benefits unexpectedly shot up $8.1 billion dollars over and above the $51 Billion they had estimated just last year. Much of the increase was due to...wait for it...wait for it...bad forecasting, bad rate-of-return assumptions and over-reliance on subsidies.

The unfunded obligation as of June 30, 2010, grew $8.1 billion from the $51.8 billion obligation identified in the prior year. Less than half of the increase was simply due to another year of costs, payments and interest. The bulk of the increase was due to a change in the California Public Employees' Retirement System's (CalPERS) pension-benefit assumptions based on their latest 10-year study. That study found employees are retiring earlier, retirees are living longer, and actual premiums increased more than previously projected by the actuary. The increase appears larger because in 2008 and 2009, CalPERS decided to use surplus funds from its health care plans to reduce increases in health care premium rates. The 2011 rates were not subsidized, causing the premiums to jump back closer to what the level would have been without the surplus.
(Emphasis mine.)

Public-sector actuaries are...how shall I put this?...highly motivated to use the most optimistic numbers for their projections. The problem is, when these projections don't pan out, guess who gets to make up the shortfall?

More on this story here.


digg this
posted by Monty at 08:53 AM

| Access Comments




Recent Comments
sock_rat_eez[/b][/u][/i][/s]: "well, let's see what happens ... I have been outli ..."

RI Red: "For the first Sunday since October, it was above f ..."

LeftCoast Dawg: "411 Unfortunately, carrying concealed LEGALLY here ..."

Ladyl, Insurrectionist: "I know! Let's get bluebell to run it! Posted by: ..."

Weasel: " Posted by: Oddbob at February 28, 2021 09:57 PM ..."

hogmartin: "[i]As far as a weekly net goes, are you thinking s ..."

[/i][/s][/u][/b]Oddbob: "Must be getting close to ONT time. Thanks Weasel. ..."

Jean: ". I could probably commit to getting WebSDR runnin ..."

Weasel: " because of major RFI issues, I only do HF portabl ..."

LeftCoast Dawg: " Late, but quick range report. Went yesterday an ..."

RandomGenerator: "Hearing him talking about the cost of energy truly ..."

blake - Dr semi lurker in marginal standing: "Oh, and late to the party, setting up a new wirele ..."

Recent Entries
Search


Polls! Polls! Polls!
Frequently Asked Questions
The (Almost) Complete Paul Anka Integrity Kick
Top Top Tens
Greatest Hitjobs

The Ace of Spades HQ Sex-for-Money Skankathon
A D&D Guide to the Democratic Candidates
Margaret Cho: Just Not Funny
More Margaret Cho Abuse
Margaret Cho: Still Not Funny
Iraqi Prisoner Claims He Was Raped... By Woman
Wonkette Announces "Morning Zoo" Format
John Kerry's "Plan" Causes Surrender of Moqtada al-Sadr's Militia
World Muslim Leaders Apologize for Nick Berg's Beheading
Michael Moore Goes on Lunchtime Manhattan Death-Spree
Milestone: Oliver Willis Posts 400th "Fake News Article" Referencing Britney Spears
Liberal Economists Rue a "New Decade of Greed"
Artificial Insouciance: Maureen Dowd's Word Processor Revolts Against Her Numbing Imbecility
Intelligence Officials Eye Blogs for Tips
They Done Found Us Out, Cletus: Intrepid Internet Detective Figures Out Our Master Plan
Shock: Josh Marshall Almost Mentions Sarin Discovery in Iraq
Leather-Clad Biker Freaks Terrorize Australian Town
When Clinton Was President, Torture Was Cool
What Wonkette Means When She Explains What Tina Brown Means
Wonkette's Stand-Up Act
Wankette HQ Gay-Rumors Du Jour
Here's What's Bugging Me: Goose and Slider
My Own Micah Wright Style Confession of Dishonesty
Outraged "Conservatives" React to the FMA
An On-Line Impression of Dennis Miller Having Sex with a Kodiak Bear
The Story the Rightwing Media Refuses to Report!
Our Lunch with David "Glengarry Glen Ross" Mamet
The House of Love: Paul Krugman
A Michael Moore Mystery (TM)
The Dowd-O-Matic!
Liberal Consistency and Other Myths
Kepler's Laws of Liberal Media Bias
John Kerry-- The Splunge! Candidate
"Divisive" Politics & "Attacks on Patriotism" (very long)
The Donkey ("The Raven" parody)
Powered by
Movable Type 2.64