Our op-ed in the Los Angeles Daily News addresses the misleading tactic of citing raw averages as an indicator of a pension plan’s generosity:
If public pensions are so modest, as the California Public Employees’ Retirement System (CalPERS) likes to suggest, why are taxpayer contribution rates continually being raised?
CalPERS insists raw averages — like the $46,100 pension the average Los Angeles-area retiree receives — is the clearest way to convey their value.
Full context provides clarity: Raw averages represent partial-career retirees, like the average 22-year career of Los Angeles-area retirees.
To compare, if a private-sector worker went to Fidelity Investments to purchase an annuity for that level of income at the CalPERS’ average retirement age of 60, it would cost $1 million. How many taxpayers have saved a million dollars after just a 22-year career, if ever?
Read the rest here.