Can Calpers keep its promises?
Can CalPERS keep its Promises?
San Francisco, Reuters, Oct. 23, 2009
Jim Christie, Reporting and Analysis
This article reports that CalPERS lost more than $56 billion in its most recent fiscal year. Most likely contributions will increase significantly, at least by 2011-12.
But the choices are hard:
increasing contributions by public workers to their retirement plans, potentially by up to 50% for some employees;
raising taxes to cover higher contribution rates absorbed by government agencies, which may also jump by 50%;
cutting public services and payrolls to shift money to retirement plans;
a combination of all of the above because existing pension benefits are “vested rights” guaranteed no matter their cost.
And none of these options will be popular with public employee unions or taxpayers.
State Treasurer Bill Lockyer told Reuters that “local entities have to accept some of the responsibility for benefit increases they voted for,” because “We have an obligation to keep the promises made to those employees.”
Read the entire article at http:/www.reuters.com/article/newsOne/idUSTRE59M23U20091023