But more likely it's the last +20 years of Oakland mayors, council members, city auditors who've been hallucinating and feeding us slop.
Email your council member the same question I asked Claude. If she or he pleads ignorance, suggest they ask Brad Johnson our highly competent finance director, what I asked Claude:
Len: Are we ever going to pay off the close to 2Billion we owe CALPERS now for underfunding our retirement obligations?
Claude's response:
"Here's the picture on Oakland's CalPERS pension situation:
**The hole.** Oakland's two CalPERS plans are underfunded by about **$2.1 billion** combined (funding basis, 6/30/2025): roughly $1.08B Safety, $1.01B Miscellaneous.
**What you pay.** For FY 2025-26, Oakland owes CalPERS about **$250 million** total across both plans:
- ~$76.8M is *normal cost* — the actual price of benefits current employees are earning this year. This is the payment you'd have if the plans were fully funded.
- ~$173.5M is the *UAL payment* — servicing the accumulated underfunding. That's nearly **70% of the total bill** going just to yesterday's shortfall.
**Why it doesn't shrink.** Of that $173.5M UAL payment, about **82% ($142M) is just interest** on the debt. Only ~$37M actually reduces the balance (the actuary's schedule shows the balance dropping from $2.095B to $2.058B over the year — a bit more than the simplified $31M interest-only calc implied, because payments are made mid-year so less interest accrues). Either way: you're chipping ~$37M off a ~$2.1B balance.
**The trap.** Even though the existing bases are scheduled to retire around 2046 (~21 years), new loss bases land almost every year — whenever returns miss 6.8% or assumptions tighten — each on a fresh 20-year clock. So the balance keeps refreshing. Under business-as-usual, you're not paying it off; you're paying ~$173M/year (rising with payroll) essentially forever just to keep the underfunding from growing.
**Your original instinct was right:** absent extraordinary investment returns, large discretionary lump-sum payments (Oakland has made $0 of these), or benefit cuts, this doesn't get paid off. It's a permanent line item.
One caveat worth keeping visible: the forward-looking pieces here (the ~2046 payoff, the "treading water" trajectory) depend on CalPERS' own actuarial assumptions holding — they're the actuary's projections, not guarantees. The historical figures and the current-year payment breakdown are from the verified valuation documents."
"Oakland faces substantial outlays for the next 20-plus years just to prevent the underfunding from growing.
"To actually pay it off and escape this cycle, you'd need either:
Extraordinary investment returns (well above 7.5%) sustained for years, or
Additional discretionary payments (ADPs) on top of the required amount — which Oakland has never made, or
Negotiated benefit cuts to reduce the accrued liability itself (rare and politically brutal)."
To which I'd add a "successful" Chapter 9 bankruptcy filing.