Retirement

A risk worth taking to cut CalPERS' pension liabilities

A risk worth taking to cut CalPERS' pension liabilities

One of the major challenges facing the California Public Employees Retirement System, which handles retirement benefits for the state and more than 3,000 local agencies, is that its $324-billion pension fund is about 35% short of the amount needed to cover current and future pension obligations — and that’s using CalPERS’ own assumptions, which critics say are too optimistic. Gov. Jerry Brown and Treasurer John Chiang have suggested a way to chip away at the shortfall, and although it’s no substitute for real pension reform, it’s a step worth taking.

The shortfall happened because CalPERS’ fund hasn’t grown fast enough to keep up with the cost increases caused by the growing...

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