California’s pension problems are well-documented. According to a report by the Stanford Institute for Economic Policy Research, the state’s public employee pension system is underfunded by $535 billion. $360 billion would have to be injected into pension and health care benefit systems immediately just to give California an 80 percent chance of meeting 80 percent of the obligations in 16 years.
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California can no longer afford its current retirement system. Estimates for unfunded pension liabilities range from 256 billion dollars to almost a trillion dollars. As a result, on October 27, 2011, Governor Jerry Brown introduced his 12-point plan to change pension and retiree health benefits for California’s state and local government workers. These changes mainly affect future employees by shifting more of the financial risk for pensions from public employers to the workers.