Unfunded Liabilities

How do we fix it?

We should switch to a 401(k) style defined contribution plan for new employees. This approach would lower costs for the state of California while proposing many other benefits. 


  • Increases: stability, transparency and certainty of the yearly aid expenditures obligatory of the government like Taxpayers.
  • Guaranteeing full funding of the system.
  • Providing workers better plan transferability and greater autonomy to capitalize their retirement money.
  • Eliminating political impact from investment decision-making.

The State of California must understand that substantial reform can solve such a significant issue. California should shift to a distinct contribution retirement system with aids similar to those established in the private sector for all future government employees.


  • Achieve an assessment of wages and benefits presented in the private sector and regulate state employee compensation to convey it in line with this standard.
  • Close the defined-benefit annuity plans for state employees and enroll all new employees in defined-contribution plans for pensions and other post-employment benefits (OPEB) such as retiree health care and dental benefits.
  • Necessitate employees who have formerly retired to forfeit their retirement checks while they are on the state’s payroll to circumvent double-dipping.
  • Initiate pre-funding OPEB obligations for employees already in the existing system, with the decisive objective to attain full subsidy.