Recent Press Releases
Studies: Pension “Crisis” a Myth
March 8, 2011
To: Interested Parties
From: Steven Maviglio, Californians for Health Care and Retirement Security
Re: Studies: Pension “Crisis” a Myth
“There's simply no evidence that state pensions are the current burden to public finances that their critics claim. Pension contributions from state and local employers aren't blowing up budgets,” – Kevin Hall, McClatchy News Service reporter.
As Republicans continue their Wisconsin-style bashing of state employees, two new reports released today show that public employee pensions are not to blame for the budget woes facing state and local governments.
Appearing on the front page of the Sacramento Bee, an independent review by McClatchy News found that the GOP attacks on public employment pensions “don’t match reality.”
Even under a worst-case scenario, the analysis noted “Boston College researchers project that if the assets in state and local pension plans were frozen tomorrow and there was no more growth in investment returns, there would still be enough money in most state plans to pay benefits for years to come.” California was on the upper end of the Boston College study among the states, with enough assets to cover 17 years.
As for the hullabaloo about unfunded liabilities, the analysis found “The unfunded liabilities would be a problem if all state and local retirees went into retirement at once, but they won't.”
"There's a window that's closing as market conditions improve and interest rates rise, the funding of these plans is going to look better than depicted by some," said Keith Brainard, the director of research for the National Association of State Retirement Administrators in Georgetown, Texas, who was quoted in the story.
In addition, this afternoon, Santa Monica-based Wilshire Associations released a study showing pension funds are rebounding from their recessionary lows that Republicans use to make their argument. Over the next decade, Wilshire projects public pension plans will have a median annual return on their assets of 6.5%. The pension plans included in the study have projected a median actuarial return of 8% over several decades. Read more here.