The Pensions That Pain Us

So, it must be true, that the former city councils are the ones that made bad decisions.

Pacific Grove is looking at a $2.3 million-a-year money pit in retirement liability that increases every year while city revenues remain relatively static.

When the bubble burst at the end of the decade and the stock market plunged following the Sept. 11, 2001 terrorist attacks, income in the system fund dipped while pension benefit costs continued to climb.

“The primary reason we have the current crisis,” mathematician and City Councilman Daniel Davis said in a report he submitted to other city officials in August, “is the city employee pension fund.”

The City Council approved an increase in benefits under CalPERS in the late 1990s at a time when it appeared the added cost to the city was negligible, Davis said, but from 2000-02, “the CalPERS return on investment in the retirement fund was negative.

The Pensions That Pain Us