July 27, 2012
External Affairs Branch
Robert Udall Glazier, Deputy Executive Officer
Contact: Brad Pacheco, Chief, Office of Public Affairs
CalPERS CEO Issues Statement on Retirement Crisis Report and Plan
Says defined benefit plans are an important cornerstone of retirement security
SACRAMENTO, CA – Anne Stausboll, Chief Executive Officer for the California Public Employees’ Retirement System (CalPERS) today issued the following statement regarding the report issued by U.S. Senator Tom Harkin, Chairman of the U.S. Senate Committee on Health, Education, Labor and Pensions. Earlier today Senator Harkin released the report, “A Retirement Crisis and a Plan to Solve It.”
“The global economic crisis resulted in some painful lessons. We saw the destruction of jobs, the collapse of the housing and financial markets, and the real threat of aging Americans having no retirement security or dignity in their Golden Years.
“In recent decades, defined benefit pension coverage has declined for private sector workers. This has led to a world of haves and have nots and has driven some to try and dismantle public sector defined benefit plans. This is not the right answer.
“Defined benefit plans are the cornerstone of retirement security. They are cost effective for both employers and employees. For employers, they are a cost effective tool for recruitment and retention. And for employees, they ensure adequate and predictable income in retirement. Research has shown that a defined benefit plan can offer the same benefit as a defined contribution plan for an almost fifty percent lower cost. This is a result of pooled risk, professional asset management, and lower fees.
“Although there are legitimate discussions to be had about the particulars of pension plans, we believe that defined benefit plans should not be discarded.
“CalPERS is committed to supporting retirement security and dignity and we welcome the discussion that will surround Senator Harkin’s report.” Read the full report.
CalPERS is the largest public pension fund in the U.S. with assets totaling $233 billion. It administers retirement benefits for more than 1.6 million California State, local government, and public school employees, retirees, and their families on behalf of more than 3,000 public employers, and health benefits for more than 1.3 million enrollees. The average CalPERS pension benefit is $2,332 per month. The average benefit for those who retired in the fiscal year that ended June 30, 2011, is $3,065 per month. CalPERS average annual investment return over the last 30 years is more than 9 percent.