Posts tagged Proposition 162
Opinion: Californians owe $500 billion they never agreed to pay
September 14, 2026 // Everything works fine if the pension fund earns at least the expected return. But if not, there won’t be enough money to redeem the pension promises when they come due. Those shortfalls — called “unfunded liabilities” — must be paid, and under California law, taxpayers alone bear that cost. Hence, pension fund boards that owe their highest duty to employees — and none to taxpayers — have an incentive to set high expected rates of return, since doing so minimizes normal cost, the only cost employees share. That incentive produces unfunded liabilities, which are interest-bearing debts.