CalPERS says retirees will soon outnumber public employees
The number of retirees receiving benefits from the California Public Employees Retirement System will soon outnumber those paying into it.
The ratio of employees paying into CalPERS to retirees taking money out fell 25 percent in the last decade, according to a recent report to the fund’s board. It is a trend that id expected to continue, according to CalPERS analysts.
Workers used to outnumber retirees 2-1. It is now about 1.5-1, and is expected to flip in the near future. Eventually retirees will outnumber active workers by a ratio of nearly 2 to 1 in some CalPERS retirement plans.
The report also states that “employers are exposed to a considerable amount of
contribution rate volatility and a risk of further changes in funded status. Contribution rates are expected to remain high for an extended period unless there is a period ofexceptional returns in the markets.”
“Our current amortization policies are expected to fully fund the plans over the next 30 years but to do so require the high contribution levels shown in this report. On a hypothetical termination basis, funded levels are even lower. This means that members will be exposed to significant or even devastating benefit reductions should employers elect to terminate their plans unless employers are able to make up the shortfall.”
You can read the entire report here.