![]() ![]() But shifting demographics are also a factor. The fact that liabilities have continued to grow even though average market returns have exceeded expectations suggests that the state pension systems have been underfunded over time. Chronic underfunding and shifting state demographics have played a role. ![]() From 1993 to 2013, CalPERS and CalSTRS’ average investment returns were 8.57% and 8.46%, respectively-above the assumed rate of 7.5%. Like many public pension funds, CalPERS and CalSTRS are long-term investors-their investments can be volatile in the short term but are expected to produce higher returns over a 20-year period. Liabilities have grown even though average investment returns have been higher than expected.Over the past twenty years, CalSTRS’ unfunded liability has increased more than $65 billion and the CalPERS liability has grown by more than $63 billion. An unfunded liability is a disparity between the estimated amount of a pension plan’s obligations and the current value of its assets. These two programs reported $62 billion and $74 billion in unfunded liabilities, respectively, for the 2013 fiscal year. The state’s two largest public retirement programs, the California Public Employee Retirement System (CalPERS) and the California State Teacher’s Retirement System (CalSTRS), cover 65% of the four million state, county, and local employees who are eligible for public pension benefits. California’s largest public pension programs have significant unfunded liabilities. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |