Pension Equality Starts with Fiscal Responsibility
November 18, 2014
The recent editorial, "Pension scheme inequity hurts cities, taxpayers" by Rudy Fischer fails to point out that the cities are responsible for determining pay and benefits for public safety employees, not CalPERS. CalPERS administers retirement plans and our job is to ensure the retirement benefits promised to city employees are properly funded.
While the budget challenges among local governments are not unique after the nation's worst financial recession, Rudy Fischer's view incorrectly blames CalPERS for the cities pension obligations. Pension obligations are a shared responsibility between the employer and the employee. The majority of these obligations are paid with investments earnings - 67 cents of every dollar that is spent on public employee pensions is from these earnings, while 21 cents is from employers, and 12 cents is from employees.
As a result of pension reform, cities have helped to manage their obligations including reducing benefits for new hires and increasing contributions from all public employees - some up to 15.25 percent of each monthly paycheck. More than 175 local governments already have decreased pensions for new hires.
CalPERS is committed to working with our partners to develop long-term funding solutions and welcomes input from cities such as Pacific Grove to ensure a more cost-effective and sustainable pension system.