Thursday, December 15, 2011

CalPERS Refutes Stanford Pension Claims

CalPERS released a rebuttal Tuesday to the Stanford Institute for Economic Policy Research's (SIEPR) most recent claims about CalPERS' long-term liabilities.  The Stanford report grabbed headlines claiming CalPERS has a significant unfunded liability, based largely on artificially low estimates of CalPERS investment returns.  The SIEPR projections getting the most attention are based on very conservative projected rates of return for CalPERS investments, between 4.5% and 6.2%.  However, as CalPERS points out, its 20-year average investment return is 8.4% and it earned 21.7% on its investments last year. Using these historical rates, rather than Stanford's hypothetical rates, CalPERS is close to funding levels most experts agree are adequate for pension systems and is rapidly recovering from investment losses in 2008 and 2009.