CalPERS Recipients Eventually Will Outnumber Pension Contributors
In the last 10 years, the ratio of CalPERS contributors to those taking money out of retirement funds dropped 25%, and that trend is expected to continue, according to a recent report by the pension fund, the Sacramento Bee's "The State Worker" reports.
Details of Report
According to the report, active employees in 2002 outnumbered retirees receiving CalPERS benefits by a little more than two-to-one. However, by 2012 there were 1.5 active workers per retiree.
Further, the report states that the ratios are "expected to continue dropping over the next decades," until retirees eventually outnumber active employees. Specifically, for some CalPERS retirement plans, retirees will outnumber active workers by a ratio of nearly two-to-one.
According to the report, CalPERS has anticipated this trend and is working to increase employer and employee contributions, among other changes, to mitigate any negative demographic effect.
The report concludes that "there is a significant amount of risk being taken in the funding of the system." It adds, "The probability that the system will face a period of severe stress is still at a level that may be unacceptable."
The report recommends that CalPERS board members "review these results carefully and determine whether or not they feel that changes are necessary to improve the soundness and sustainability of the system" (Ortiz, "The State Worker," Sacramento Bee, 11/25).
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