Public Workers in Two California Towns Face Pension Cuts from CalPERS

CalPERS to Vote to Slash Pensions for Retirees of Two Public Agencies

Public employees and retirees of two government agencies in California are facing pension cuts as the state’s largest retirement fund is set to vote on slashing their payout.

The California Public Employees’ Retirement System (CalPERS) is planning to cut ties with two small districts since they have failed to pay their bills.

A total of 10 workers and retirees are expected to have their pensions cut after their employers—Trinity County Waterworks District No. 1 in Hayfork and Niland Sanitary District in Imperial County—defaulted on their contract with CalPERS.

Five workers and retirees with Trinity County Waterworks are facing 70% cuts to their promised pensions, while another five with Niland Sanitary District could see cuts ranging from 92% to 100%.

Trinity County Waterworks owes a whopping $1.6 million to CalPERS, while Niland owes $200,000 to cover the costs of its workers’ pensions.

These two agencies are in line to join another two government bodies that have split from CalPERS in the past 12 months.

What’s alarming is that California’s largest pension fund is now underfunded because of these defaults and lower contributions from government agencies.

CalPERS, which is a $333.0-billion pension fund, manages the benefits of 1.8 million members and partners (as of 2016), with more than 1,500 government agencies in the state.

However, the fund only has 68% of the assets it would need to pay all its member benefits immediately. Public workers are worried that more pension cuts could follow if CalPERS continues to be underfunded and additional government agencies fail to make timely payments.

Sadly, California is not the only state where public employees are fearing pension cuts. Conditions are even worse in Illinois, Alaska, and Connecticut, according to the ratings agency Moody’s Corporation.

Moody’s says unfunded state pension liabilities in America have crossed a whopping $1.3 trillion, as many states are running short on money to pay for their employees’ promised pension benefits.

In fact, Moody’s only sees the situation getting worse over time; it predicts that unfunded liabilities will hit $1.7 trillion by end of this fiscal year.



“Public workers from two more towns expected to lose CalPERS pensions,” The Sacramento Bee, September 13, 2017.

“CalPERS at a Glance,” California Public Employees’ Retirement System, June 30, 2016.

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