California Governor Arnold Schwarzenegger last week created a commission to consider overhauls to the state’s $381 billion retirement system, resurrecting an issue he dropped last year after a pushback from government employees.
California’s two state pension funds have $49 billion less than they will need to pay for all the benefits promised in the coming decades and as much as $70 billion less than needed to cover health-care benefits, the governor’s office said in a statement. The 12-member commission-half of which will be appointed by the Democrats who lead the Legislature, and the rest picked by the governor, has until January 1, 2008, to explore ways to eliminate those gaps.