Ah Ha! State Beginning to Acknowledge UC Pension Liability Claim

The State of California is about to sell $2 billion in general obligation bonds.  To do so, it must issue a prospectus detailing the terms of the bond but also the fiscal condition of the state.  The prospectus that has been issued on a preliminary basis includes information on other state liabilities including pensions.  Much of the information is about CalPERS and CalSTRS.  However, the disclosure contains the following statement on page A-82 (which is pdf page 122 at the link towards the bottom of this blog entry):

“The University of California maintains a separate retirement system. The state’s General Fund does not directly contribute to the University of California’s system, however the system has been advocating that the state begin to do so.)  Information about this system can be obtained directly from the University of California.”

In short, the prospectus is acknowledging that a prospective buyer of state bonds should be aware that there may be a liability by the state for the UC pension.  Why make the disclosure if the UC pension liability is viewed by the state as irrelevant?

The prospectus is currently on the Treasurer’s website for bond sales.  But such files are removed after the sale.  So, to preserve it, I have put it at:

https://docs.google.com/open?id=0BzVLYPK7QI_4ZkZoX05relpSU09IYnM4dnRCSHFOUQ

This may even go beyond ah ha.  It looks closer to Gotcha!