Full editorial at http://www.sandiegouniontribune.com/news/2015/dec/04/brown-calpers-pension-union-tribune-editorial/
So what's the significance of such critiques for UC? UC's assumed pension return was recently cut from 7.5%/annum to 7.25%. But there continue to be statements from UC's finance and budget types that even 7.25% is too high:
Chief Investment Officer Jagdeep Singh Bachher: 6-ish rate (Sept. 9, 2015, meeting of UC Regents' Committee on Investments):
Associate Chief Investments Officer Arthur Guimaraes: 5 to 7 percent (Oct. 29, 2015, statement to retirees):
Nathan Brostrom and Regents consider 7% or less: (Nov. 19, 2015, Regents meeting):
These public statements suggest that the estimated unfunded liability of the pension - other things constant - is likely to rise as the expected rate of return is lowered. That (likely?) outcome has implications for planning for a new capped pension tier for new hires. Any plan for such a tier should consider the estimated unfunded liability which will have to be paid off over time. Simply creating a new (lower) tier for new hires is bad enough. Getting payments from those new hires - directly or indirectly - to cover that liability is going to be a problem. All of that should have been considered by the Committee of Two, but obviously wasn't. Now it's in the hands of another committee that is operating under a very tight time frame, too tight to solve such problems (assuming they can even be solved).