CalPERS recognizing their discount rate is inappropriately high; yet political pressure is used as a counter argument against adopting a fiscally sound rate!
CalPERS is considering small increases in employer and employee rates over decades to reduce the risk of big investment losses, a policy that also would lower an earnings forecast critics say is too optimistic.
The proposal is a response to the “maturing” of a CalPERS system that soon will have more retirees than active workers. From two active workers for each retiree in 2002, the ratio fell to 1.45 to one by 2012 and is expected to be 0.8 to 0.6 to one in the next decades.
As a result, investment losses will trigger bigger California Public Employees Retirement System employer rate increases. It’s a kind of “leveraging” effect as the investment fund becomes increasingly larger than the payroll on which rates are based.
The risk of big investment losses is a threat for other reasons. Funding could drop below 50 percent of the projected assets needed to pay future…
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“CalPERS is considering small increases in employer and employee rates over decades to reduce the risk of big investment losses, a policy that also would lower an earnings forecast critics say is too optimistic.”
I guess those employer/tax payer rate increases will be on top of the dozens of other small rate increases which now loom large. And how is it that CalPERS has the nerve to even consider more rate increases when the current rate increases are just now beginning to be being phased in? And how is it that CalPERS is NOW asking for more when they just approved 99 different ways for their members to side-step Governor Brown’s already weak 12 point pension plan (which he hasn’t even defended) costing the employer/tax payer more dollars that don’t exist in many cases?
– instead of attempting/pretending to placate the abused tax payers, under the guise of answering critics cry’s regarding overly optimistic earnings forecasts (which are very real), how about someone/anyone fire their entire Board of Administration, the current CEO, and replace them with people that will actually manage the pension fund to the benefit of all.
CalPERS is the worst run and most destructive organization in this state … CalPERS is hopelessly & pathetically CORRUPT!
I posted the above comment on the Calpension website but it wasn’t published by the moderator.