California Common Sense has constructed three visualizations that show the data gathered and analyzed by Joe Nation (Stanford Institute for Economics and Policy Research) and Evan Storms (Stanford Junior and California Common Sense researcher). Below, learn what the visualizations show and feel free to share these images online or in media coverage.
The first visualization shows California’s pension funding status under a variety of assumed investment rates of return (http://beta.cacs.org/visualization/1518). See here:
The graph above shows the probability distribution of unfunded liabilities for an assumed average investment rate of return of 6.2 percent. Using the interactive tool, you can select an alternative investment rate of return and see how it impacts the unfunded liabilities and funding status (select between these in the lower right hand corner). The bottom graphs show the probability of each plan meetings its obligations. You can select to see the probability of achieving either an 80 percent funded status or 100 percent funded status. This screenshot shows that assuming a 6.2% rate of return, there is an 81.7% chance that CalPERS will be less than 80 percent funded 16 years from now. An 80 percent funding ratio is the standard measure of plan sustainability and security.
Another visualization at shows projected public retirement system costs in comparison to current spending on various discretionary programs. See below:
The menu in the upper left hand corner allows you to choose a particular plan to look at. This screenshot shows that California annual pension expenditures on CalPERS systemwide, CalSTRS, and UCRP combined will be more than $25 billion annually (assuming a 6.2 percent investment rate of return). The blue bars show the magnitude of non K-12 Education and non-Health and Human Services state general fund spending. Under the 6.2 percent assumption, California annual expenditures on pensions will be approximately the same total general fund spending on CalEPA, Labor and Workforce Development, State and Consumer Services, BTH, General Government, Natural Resources, the Legislature, the Judiciary, the Executive branch, Corrections, and Higher Education. Unless the state is able to raise an additional $15 billion in revenue, these large annual pension expenditures will likely require substantial cuts to much of the above discretionary general fund spending. This is only meant to be illustrative of the magnitude of these obligations and their implications for other spending priorities.