Susan Mangiero in her Pension Risk Matters blog writes about a recently introduced bill in California that would prohibit a company from paying out dividends or buying back shares until all required defined benefit plan payments have been made. The proposed bill – and the politics behind it – conveniently ignores the massive unfunded pension liabilities in California, e.g, the California State Teachers’ Retirement System faces a $24 billion unfunded pension liability.
But we got them beat in my home state of Illinois which at $35 billion has the largest unfunded pension obligation in the country. The Fitch Rating service released a “negative outlook” for Illinois finances – one of only three negative outlooks issued by the rating service in its review of the states. The other two? Louisiana dealing with the aftermath of Hurricanes Katrina and Rita and Michigan dealing with massive problems in the automobile industry.
Um! Should there should be a law that no more salary increases for state legislators until pension liabilities are met?