Study: California's Pension Shortfall Reaches $500B

SACRAMENTO, Calif. (AP) — A Stanford University-based economic think tank says California's public employee pension plans face long-term shortfalls as high as $500 billion and that costs are skyrocketing every day.

In a report released Tuesday, the Stanford Institute for Economic Policy Research said the shortfall in the plans that cover 2.6 million California teachers, state workers and university employees is too large to be solved only by cutting future benefits.

Economist and former state Assemblyman Joe Nation says it costs the state $3.4 million for each day that lawmakers fail to change the pension benefits and contribution levels. He released the report with a privately funded student-led group.

A group that represents public employees, Californians for Retirement Security, called the study irresponsible and said it used "faulty data to support a political agenda."

To read more about Stanford Institute for Economic Policy Research study, you can go to the website for California Common Sense at www.cacs.org/transparency_pensions.php.

Copyright 2011 The Associated Press.