No, this is not true. CalPERS is a huge investment fund. My own much smaller pension has a (nominally) large investment fund and believe me it ain't sitting in a money market fund at Wells Fargo. I don't have survey data for you but I am going to go ahead and state that the vast majority of money in pension funds is invested to hit some assumed rate of return with minimized risk / diversification targets.
In fact, the system is so corrupt, 80% funded (of that rosy number) is considered “fully funded” for taxpayer funded DB pensions, so kicking the can forward for the remainder 20% is just par for the course.
The real situation is worse though, and clearly evident in the ever increasing proportion of the budget going to pay for deferred compensation schemes, whether it is the “normal cost” for this year’s accrued benefits or to make up for underfunding from previous years’ benefits.
Im talking specifically about Illinois pension funds, which were unfunded for decades. There's no money sitting in them at all, everything that comes in immediately goes out.
Pay-as-you-go is more risky and more costly overall but it's not an unworkable system.
Since you clarified that you mean one specific state has this system, then I'd say the rest of your post is bogus too. Current taxpayers didn't agree to build old bridges or whatever either. Few people living agreed to build out the state highway system. Yet taxes today pay for their maintenance and upkeep and it's not some great moral problem.
But it kind of is a great moral problem: A whole lot of infrastructure in the US is way overbuilt, with maintenance sent forward decades. The cost of the infrastructure isn't really handled by the people that built it, or those that use it today: It's left as a giant ball of debt to children and grandchildren.
A major reason for problems with old suburbs is that, unless they massively appreciated in value, and accept very large taxes, the per-house costs of rebuilds and maintenance isn't handled by the people that live in said suburb, but kicked outward. There's all kinds of very bad incentives, caused by how we have this kind of infrastructure. It's all over midwestern cities, and the outer suburbs that are getting built are doing the very same thing.
How do you know? Perhaps that person built or improved something very important to your life. Even if they stamped papers at the DMV for 40 years, someone needed to do that work if we're to have a functioning society.
And don't wave that away saying that worker could now be replaced by a kiosk and AI, or a contractor in India. Someone needed to do that work, manually and in-person in the 80s and 90s when that wasn't an option. If you want to slim down the civil service today, that doesn't erase the work done by those workers in the past.
Finally, remember that you don't personally benefit from every tax dollar, but as long as many (or sometimes even a few) do, then that dollar wasn't wasted on those grounds alone.
I think these are all reasonable arguments. It’s just hard for me to take them seriously with how corrupt our government is. Yes these are all factors, but the main thing is just that politicians 60 years ago decided to give themselves bribes instead of funding the pension and now I’m paying for it.
Not all infrastructure benefits everyone. No doubt some of the taxes you pay today cover the costs of maintaining boondoggle projects or wastes of money. And the pension might not directly benefit you today, but let's say those pension benefits go to a woman who used to maintain the bridge. Now today the bridge is in better shape than it otherwise would have been if they'd been done by some high-turnover, low quality employee.
CalPERS the fund that famously didn't put a dime in for basically a decade? The one everyone was sure was going to bankrupt California until they lucked out and the stock market saved them?
CalPERS was prudent in planning that the federal government would, as usual, backstop asset price growth even if it meant near 0% interest rates reducing purchasing power of the USD. Aka, taxing future generations to pay for the underfunding. And even after all that currency devaluation, CalPERS is still only 80% funded, by their own calculations.
At least previous California legislators were generous enough to not bake cost of living increases for DB pensions into their state constitution like Illinois.
