By The Associated Press Staff WriterAssociated Press WriterThe church pension is facing a crisis because of a $1.8 billion pension liability in California that will increase in 2018 as a result of a federal law requiring states to provide retirement benefits to the state’s public employees.
The pension system is projected to reach a $2 billion surplus in 2022, according to a report released Monday by the California State Teachers Retirement System, which serves about 16,000 workers in about 1,300 districts.
California’s public workers pay for pensions to support retirees who are also the taxpayers, but it is a different kind of liability that must be funded, state Treasurer Mike DeBonis said Monday.
The pension liability is now at least $1 billion.
The church, which had been funded by contributions from the California taxpayers, is at risk of having its funding reduced or the fund closed down if it cannot pay the remaining pension obligations by 2020, DeBoni said.
The church’s pension liabilities are also likely to be more than $300 million in 2022.
In a letter to the Legislature on Monday, the California Teachers Retirement Board said it will request that state officials provide it with $1,600,000 to cover its costs.
The trustees also are considering taking a public offer on the church’s debt and other creditors, Debonis said.
The state, which will decide whether to seek an offer in June, must act within 60 days of receiving the letter, the trustees said in the letter.
DeBonis and other officials said the pension system’s financial situation was under control and that the church and its creditors had not been aggressive in trying to reach agreement.
The trustee board is also exploring options to raise $1 million from bondholders, including a private equity firm that has stakes in companies in the energy and medical sectors, according.
The fund also could raise money from private equity firms, according the letter from the trustees.
Debonis called the trustees’ actions “very irresponsible.”