CalPERS retirees soon to surpass workers

by John Seiler | December 5, 2014 6:31 am

Outgoing San Jose Mayor Chuck Reed[1], the Democratic pension reformer, has a great joke. He says that, soon, his city will have a single employee; whose only job will be to mail pension checks to retirees.

CalPERS is gettin’ there.

Reports Calpensions.com[2]:

In a few years CalPERS retirees are expected to outnumber active workers, a national trend among public pension funds that makes them more vulnerable to big employer rate increases.

A mature pension fund for a growing number of retirees becomes much larger than the payroll. So if the pension fund has investment losses, an employer rate increase to help fill the hole takes a bigger bite from the payroll.

The growing number of retirees, partly due to aging babyboomers, is one reason a staff report last week[3] argues that CalPERS has too much “risk” and should consider a number of options during a board workshop early next year.

The “employer” stuck with the “rate increase,” of course, is the California taxpayer.

Those who haven’t left.

Texas welcome sign

Endnotes:
  1. Chuck Reed: http://www.institutionalinvestor.com/article/3394205/investors-pensions/pensions-play-a-key-role-in-san-jose-mayoral-election.html
  2. Calpensions.com: http://calpensions.com/2014/11/24/calpers-retirees-outnumber-active-workers-soon/
  3. report last week: http://www.calpers.ca.gov/eip-docs/about/committee-meetings/agendas/financeadmin/201411/item7a-01.pdf

Source URL: https://calwatchdog.com/2014/12/05/calpers-retirees-soon-to-surpass-workers/