Some months ago, a baby-boomer friend of mine told me his retirement plan was to "work until I die." We both chuckled.

No one who has watched the equity in their homes and the value of their investments virtually vaporize before their eyes in recent weeks would find this funny. Many of those who were planning to retire in the next 10 to 15 years are now looking at work as the only way to see them through their "golden years." Those already retired are especially vulnerable even though Social Security payments are going up by almost six percent next year. And generation X is anxious too. Those now at the midpoint in their working careers are wondering if there is such thing as a "secure" investment and they are starting to take seriously warnings that Social Security -- a system that relies on those who are working to support those who are retired -- may run out of money before they retire.

But as bad as things look now, they could get a lot worse in a hurry. As threatened and beleaguered California taxpayers trudge toward retirement, coming up quickly behind them are public employees who are looking to hitch a piggyback ride.

Our current system for providing for the retirement of public employees -- who are rated as the most highly paid in the nation by the U.S. Census Bureau -- is a contractually guaranteed defined benefit for each and every one. This means that no matter how poorly investments by the California Public Employees Retirement System (CalPERS) perform, taxpayers are obligated to make up the difference. This is also true at the local level. For example, the annual taxpayer contribution to the Los Angeles County Employees Retirement Association (LACERA) has increased from $194 million in 2001 to $752 million last year.

According to Bloomberg News, CALPERS has lost almost $67 billion in 12 months, more than 25 percent of its value, as stock and bond markets tumbled. The California State Teachers' Retirement System (CalSTRS) has also lost 25 percent of its value.

This is not good news for taxpayers, who are already on the hook for several hundred billion dollars in unfunded liability for public employee pensions and retiree health care plans. These costs were already placing a heavy burden on California taxpayers and with the stock market decline, "it's going to be even more costly now," says former Assemblyman Keith Richman, who is president of the California Foundation for Fiscal Responsibility.

While in the Assembly, Richman was a strong advocate for replacing the defined benefit system for new employees, with one that provided a defined contribution by the state to the retirement plan of the employee's choice. Facing fanatical opposition from public employee unions even though current workers would not be impacted, Richman has recently recommended an approach that would provide a more actuarially sound foundation, but retain the defined benefit system. For example, some public safety employees are able to retire at age 50 with 90 percent pay. Richman would require employees to work several years longer so that they pay a little more toward their own retirement and collect for several years less.

As things stand now, California private sector workers are struggling to make ends meet and put a few dollars aside for retirement, while at the same time they are forced to contribute so that public employees at the state and local level can enjoy a certain, secure and comfortable retirement.

The obligation to current workers and retirees is contractually binding. But taxpayers and public workers, alike, should recognize that some modification of the retirement system for new hires is in order now, so that harsher measures do not become mandatory in the future.