It doesn't take a genius to predict that the state's two big public pension funds, Calpers and Calstrs, could figure prominently in the state's budget mess.
The two retirement systems are underfunded following a year of terrible investment losses. At some point they'll need hundreds of millions of dollars in additional annual contributions from their various constituencies - the state, the school districts and municipalities, the employees - to pay their pension obligations.
Calpers has the authority to demand higher payments and plans to do so beginning in July 2010. Calstrs has to go begging the Legislature for permission to raise rates, and is starting to beat the drum for such an increase.
But it won't come easy. Republicans and Democrats are tossing out the idea of raising retirement ages as a way of cutting pension costs. On former San Diego newsman Ed Mendel's pensions blog, ex-Assemblyman Keith Richman is proposing a one-year pension "holiday" in which the state would defer the $4.6 billion it contributes to the two pension funds. And municipalities, school districts and others that use Calpers and Calstrs for their pensions aren't thrilled about the prospect of higher rates at a time when they're laying off workers.
Let the fun begin.