PD Editorial: CalPERS falls further behind
CalPERS, the giant state and local public employee pension fund, posted a tidy 6.7% return on investments for the recently concluded fiscal year — and lost ground on its obligations. Anything less than 7% and the debt piles up higher, meaning bigger bills for public employers, many if not most of which already are paying more than ever before to cover employee retirement costs. Looking ahead, well it doesn’t get much better. A CalPERS consultant who had projected a 6.2% return over the upcoming decade, according to the news site CalPensions, has lowered the forecast to 5.9%. And if there’s a recession, the picture could get even worse.
Here’s a little good news to go with the bad: The California Association of Highway Patrolmen — the union representing CHP officers — agreed to forgo a half-percent of a 3.5% percent raise, allowing $25 million to instead go toward paying down pension debts, according to a Sacramento Bee report. The big increases in public employee pensions (and public pension debts) began in 1999 with CHP officers. Now that they’ve agreed to pitch in a little to address the problem, perhaps other public employees will do the same.
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