December 15, 2011
CalPERS Calls Critical Stanford Pension Study an Exaggeration
A Stanford University-based economic think tank has asserted that California's public employee pension plans are skyrocketing, yet the nation's largest pension fund claims the study exaggerates.
"The study is written from a perspective that is intended to exaggerate perceived costs and the instability of pension systems,” said Ann Boynton, Deputy Executive Officer of CalPERS Benefit Programs Policy and Planning, in a statement released on the fund's website. “The report’s findings were based on low discount rates to artificially magnify unfunded liabilities. It is important to remember that CalPERS invests in a highly diversified portfolio that includes stocks, real estate, and other assets that have historically earned significantly higher returns than the rates assumed in the study.”
The Stanford Institute for Economic Policy Research claimed that the shortfall in California's plans is too large to be solved only by cutting future payouts, noting that the state's plans face long-term shortfalls as high as $500 billion -- a number that continues to grow rapidly. According to economist and former state Assemblyman Joe Nation, the report's author, the shortfalls cost the state $3.4 million for each day that lawmakers fail to change the pension benefits and contribution levels for public employees...
LINK - AI-CIO.com
