Government workers forced to pay bribes to a union to work do not understand the contracts promoted by the unions are forcing them to pay more for a collapsing pension system. At the same time cities and counties are being forced to cut basic services to pay for the double digit mandated contributions starting July 1, 2017. Some cities might be forced into bankruptcy—all because the Sacramento Democrat and their union owners refuse to allow reforms of the system.
“”Right now, 64 percent of pension benefits come from investment returns, 22 percent are from state and local governments and 13 percent are from employees,” KPIX, the local CBS affiliate, reports.
“On Wednesday, CalPERS voted to decrease the expected returns on investments from 7.5 percent to 7 percent. That means the state and local governments and employees will have to pay more to make up the shortfall.”
CalPERS said the new change will now bring in $2.3 billion over the next five years, as the fund hopes to jumpstart growth and keep itself stable for the long-term.
What are they talking about, 7%–last year they earned .61%–900% less than they need to reach the money losing 7%. This is a disaster and the government pretends it does not exist.
Calpers headquarters is seen in Sacramento, California, October 21, 2009. REUTERS/Max Whittaker
CalPERS votes to raise workers’ costs for pensions, as growth stagnates
Riley McDermid, San Francisco Business Times, 12/23/16
The California Public Employees’ Retirement System has voted to raise the cost of its pensions, as the nation’s largest pension fund continues to lose money amidst a historically strong bull market.
CalPERS manages $300 billion for its almost 2 million members, who are public employees of the state of California.
The California Public Employees’ Retirement System provides health coverage for 2… more
“Right now, 64 percent of pension benefits come from investment returns, 22 percent are from state and local governments and 13 percent are from employees,” KPIX, the local CBS affiliate, reports.
“On Wednesday, CalPERS voted to decrease the expected returns on investments from 7.5 percent to 7 percent. That means the state and local governments and employees will have to pay more to make up the shortfall.”
CalPERS said the new change will now bring in $2.3 billion over the next five years, as the fund hopes to jumpstart growth and keep itself stable for the long-term.
“The last 10 years, really since the great recession, has been fairly stagnant,” Richard Costigan of the CalPERS Board of Administration told the station. “We may have had highs in the markets and lows in the market but we have not had a lot of significant growth.”
Former San Jose Mayor Chuck Reed said CalPERS decision is a step in the right direct for pension reform, even if it doesn’t go as far as he’d like.
“So lowering the assumed rate of return is really a step toward the reality that pension investments are not going to be as lucrative as they have been in the past,” Reed said. “And we need to put more money into the system to ensure that the system doesn’t fail.”
About Stephen Frank
Speak Your Mind