California Public Employee Retirement System Pension Funds - Could they go Broke as Study Suggest?
[Best Syndication News] The California Public Employees' Retirement System (CalPERS) disagreed with the way that the recently released study titled “Going For Broke: Reforming California’s Public Employee Pension Systems” issued by Stanford’s Institute for Economic Policy Research come to the conclusion that the public employees pension funds are in dire trouble.
CalPERS said that the average annual investment on return over the last 20 years have been 7.91 percent. This includes the last two years of declining return on investments. The government agency made a list of reasons why they think that the Stanford study was flawed and doesn't have an accurate prediction of the public retirement fund. They list their rebuttle to the report at: http://www.calpers.ca.gov/index.jsp?bc=/about/press/pr-2010/april/responds-stanford-policy-brief.xml
The Stanford report was put together by five graduate students. They studied public records for financial performance history of the California Public Employees' Retirement System (CalPERS), the California State Teachers' Retirement System (CalSTRS) and the University of California Retirement System (UCRS). Together 2.6 million Californians receive pensions from these retirement programs. They ran computer simulations for predicting how the unfunded liabilities of the pension funds would play out over a 16 year time period.
"This is a really dire situation," graduate student Howard Bornstein said today at a press conference at the Stanford Institute for Economic Policy Research (SIEPR), who is one of the students involved in the study. "If we don't do something now, we're going to have major issues in just a few years."
According to the Bornstein, the state would need to put anywhere from $200 billion up to $350 billion in the funds today in order to resume to a minimum responsible level of funding. This number he adds is four times the state's budget.