Pension funds likely to need cash (June 23)
By Chuck Doud
The Madera Tribune
Mrs. Doud and I are fortunate in that the cat’s retirement fund probably won’t break us. We’ve been putting aside some Kit ’n’ Kaboodle here, some Friskies there. When she actually retires, she won’t have to do so much work to get her food. Now, she has to squawk and rub legs twice a day to get fed. After she retires, we’ll just get her one of those big automatic feeders, fill it with her retirement fund, and let her have her way with it. We’ll all be happy.
I was thinking about this because at last week’s City Council meeting, a warning flag about pensions was unfurled. Ken Pun, CPA, the city’s outside auditor, said the city’s pension costs could “increase significantly” over the next two years because of investment losses in the state pension fund.
He said the city should do an actuarial report on what that potential liability could be. Won’t that be fun.
And it’s not just the city that has a pension problem. Madera may have kept up its pension funding pretty well, compared to some other municipalities. The county may have a scary liability, and so may the school district. And, of course, the state owes a bundle to its present and future retirees.
A few years ago, the public pension funds were fatter than the Pillsbury Doughboy. They had so much cash, and were raking in so much interest income that they were able to provide new retirees with big bonuses for taking early retirements. They were throwing off so much money that many municipalities did not contribute to their employees’ pensions, or if they did contribute, gave very little.
Now, because of investment losses, the pension funds may not be able to meet their obligations. Yet, those obligations must be met.
And guess who will have to meet them. It will not be your cat.
