Across America, state and local government employee pension systems report unfunded liabilities of $1 trillion. But, this calculation rests on very dubious assumptions that the annual investment earnings of these funds will be as high as 8 percent annually. Few state-run retirement systems have seen consistently high earnings returns.

If the investment returns are closer to reality, say, 3 percent per year, the $1 trillion liability rises to $4.83 trillion, an average of $41,219 per household.

Government employee retirement systems are underwater for a few reasons: politicians like to promise benefits for government employees in return for election support; politicians don’t like to ask those same employees for higher employee contributions to their own retirements; when times are tough, politicians are tempted to cut back payments into the retirement systems they oversee; and, when times are good, they’re also tempted not to put in money as the investment returns bounce back. The net result is that most state and local pension systems are woefully underfunded.

Not to worry though, the Obama administration’s Labor Department has issued a rule pressuring states and large local governments into offering government-run retirement plans for private sector workers. Curiously, this move may bailout troubled pension systems while massively increasing their political clout.

California just passed a law to force 7.5 million private sector workers to pay into the state retirement system. In this, the Golden State joins Illinois, Connecticut, Massachusetts, Oregon and Maryland. Of note is that these six states rank from having the 2nd to the 13th-worst unfunded pension liabilities in the nation, with Illinois’ pension debt estimated at $77,822 per household according to the Stanford Institute for Economic Policy Research Pension Tracker website. Minnesota is actively studying the issue; they have the 18th-highest per unfunded pension liability. New Jersey’s legislature passed a bill to expand its state retirement system to non-government workers, but Gov. Chris Christie intelligently vetoed the plan.

In January 2016, Republican New Jersey Gov. Chris Christie vetoed a risky government pension system expansion patterned along the lines of California’s newly-enacted bill.  (AP Photo/Mel Evans)

Why are the weakest government pension systems seeking to force private sector workers to pay into their accounts? There are four reasons: the infusion of new cash can help the balance sheets; millions of additional voters will be made more dependent on government programs; those same voters will be invested in ensuring that state-run pension systems are adequately funded; and the political appointees and politicians who oversee those retirement systems will have billions more in investment leverage to pressure corporations to bend to their progressive demands.

This latter point is little understood. The California Public Employees’ Retirement System, CalPERS, manages $300 billion for its 1.8 million members. It’s the nation’s largest government pension system. CalPERS’ considerable holdings allows it to play an outsized influence on corporate decision making. For instance, a few weeks ago, CalPERS and its teacher retirement counterpart in California, CALSTRS, announced that they would vote against the re-election of UK-based Sports Direct chairman Keith Hellawell as well as its founder, Mike Ashley, at the behest of labor unions who were seeking concessions from the company. $300 billion speaks loudly. Billions more from millions of additional workers pushed into the system would amplify that voice.

There’s a fifth reason liberals want to enlist private sector workers into government-controlled retirement systems: it provides another avenue for income equality.

Just as with utility bills that are marked up for average ratepayer to subsidize electric, gas and water bills for the poor, with the transfer payments never being voted on or accounted for in any governmental budget, the same will happen with forced government retirement accounts—all in the name of fairness. Once established, it will only take a modest new law to attach a small surcharge on payroll deductions to help the working poor. The argument for this has already been laid down in California when retirement board staffers suggested that workers might see as much as 10 percent of their paycheck deducted for retirement savings. Advocates for lower income workers cried foul, saying those workers could not afford to save so much. As a result, the default contribution rate was set at 3 percent of income. Of course, 3 percent won’t be enough on which to retire comfortably, so, the solution will be a bill, call it the “Income Equity Retirement Act,” which will snip a little bit of money off the payroll deductions from some workers to give to others.

Huge government retirement savings accounts run by liberal politicians—what could possibly go wrong?

Chuck DeVore is Vice President of National Initiatives at the Texas Public Policy Foundation. He was a California Assemblyman and is a Lt. Colonel in the U.S. Army Retired Reserve.