CALPERS PERSPECTIVE -
FINANCIAL CRISIS
By Claude Alber
There has been much attention given to the current stock market distress and credit crunch in the last several months, and it appears that the end is not in sight. I have been asked on several occasions what effect these issues might have on the future of the pensions in the CalPERS system.
CalPERS has responded to these questions in a recent press release. They present the members with the following points.
“The CalPERS pension system remains sound amid the current market downturn”
“Our members’ defined retirement benefits are guaranteed by law and remain secure, unthreatened by market swings.
“We will withstand current market fluctuations with our highly diversified portfolio, and by keeping focused on long-term investments.”
In this press release they explain how the rates for local agencies have been stabilized in the last few years. They comment on how the current financial crisis came to be and how they would attempt to influence the reforms that are needed to fix this current problem and hopefully prevent future collapses.
This press release and many more releases can be located on the CalPERS website at www.calpers.ca.gov. Go to the “About CalPERS section, and then proceed to the “Press room.”
I suggest that each of you check this section frequently, especially if the issue of financial stability in the pension system becomes an issue at the bargaining table. While there, sign up for two important services that are available.
First, CalPERS ePress Alerts, which will send you an e-mail notification when a press release is issued by CalPERS. Second, CalPERS eNews, which will send you a bi-monthly electronic newsletter on CalPERS issues, activities, and programs.
These services should keep you up-to-date on the issue today and tomorrow. There are other sections of the CalPERS website that can be of assistance, especially in the area of labor negotiations.
If you are doing a salary survey and need to compare the pension costs for another agency, you can find that agencies current contribution. You can also find which agencies have 3%@50 or 3%@55, you can get a list of the current optional benefits available through the system, plus much more.
As a service to our members, all of these items listed are linked to the PORAC website, www.porac.org. Take a look sometime.
If you have any questions, or require any further clarification about the above information, please contact CalPERS at 888-CalPERS (or 888-225-7377).