The UAPD Retirees’ chapter held a meeting in San Diego on October 23rd. The retirees discussed the exaggerated and untruthful attacks on the California Public Employees Retirement System (CalPERS) being made by Meg Whitman and other Republican candidates for office this year.
Whitman and others have tried to portray the plan as unsustainable and as a drain on taxpayer resources. The truth is that CalPERS has sufficient assets to pay the pensions of current and future public employee retirees covered by the plan.
CalPERS looks at the long term when making investments. It expects a return on investment over a twenty year time period to be 7.75%. Plan trustees recently reported that CalPERS return on investment over the last 20 years is 7.65%, just slightly below the target rate. In other words, the awful stock market performance of recent years was offset by strong years in the past.
Another report from CalPERS said that only 15% of the fund’s assets were contributed by public employees and 22% from public employer contributions–an amazing 63% of CalPERS assets came from the return on its investments. This, too, gives lie to Whitman’s claim that public pensions are a burden on taxpayers.
Equally impressive is how quickly CalPERS is recovering from the latest recession, having substantially increased its assets since the depths of the stock market crash in March 2009. CalPERS currently holds $220.1billion in assets, up some $40 billion in the last eighteen months. The pension fund reported a 13.3% return on investments for the year ending June 30, 2010.
Finally, CalPERS staff has estimated that the pension concessions made by state employee unions in 2010 negotiations, which apply only to newly hired employees, will save CalPERS some $70 billion over the next 30 to 50 years.
All this is good news for pension holders. The numbers show that CalPERS has always been financially secure; the job of the unions is to make it politically secure as well.