California's never-never-land pension plans, which assumed the Dow would reach 28 million by 2099, may have re-entered reality, thus saving U.S. taxpayers in other states the onerous and expensive job of bailing out the Golden State.

According to The Economist, California Governor Arnold Schwarzenegger recently reached a tentative agreement over future pension benefits with four public-sector unions, which represent 23,000 of the state’s 170,000 unionized state workers.

If the deal is confirmed, newly hired public employees such as firefighters and traffic police will be required to contribute more of their own salaries and retire later in order to collect their pensions.

Admittedly, the savings would be small, but California’s other unions may well cut similar deals. If they do, the disastrous policy of increasing state workers pensions by 20 percent to 50 percent could come undone.

Some state departments are still catching up to reality.

For example, on the same day that Schwarzenegger did his deal with the unions, California Public Employees’ Retirement System (CalPERS) ordered the state to increase its annual pension payment to almost $4 billion, despite the fact that two separate studies estimate California’s unfunded pension liability at about $500 billion, almost seven times its official debt.

According to TheCalifornian.com, while some private pension plans allow retirees to start collecting somewhat reduced benefits at age 55, many retirees from California government jobs — especially police and firemen — can start collecting full pensions five years earlier than that.