![]() CalPERS shows that for every dollar paid to retirees, 65¢ comes from Investment earnings, 22¢ comes from employers, and 13¢ comes from member contributions. When groups like Citizens for Sustainable Pensions shout "we pay your pension!" to firefighters, they are simply wrong. ![]() The employer's contribution fluctuates between 0% and 30%. The remaining 35% is paid by a combination of the employee's contribution through payroll deduction (14%-18% of salary), and the employer's direct contributions. 65% of benefits are paid from interest and dividends on investments Because firefighters can't collect social security, they have negotiated over decades to pay for increased traditional retirement benefits instead. The lack of Social Security benefits and the associated payroll savings to local government is rarely mentioned in discussions about public employee benefits. These plans provide post-retirement income comparable to a 401K savings type plan PLUS Social Security, for a retiree who planned and saved appropriately. Their employers - the cities and counties - do not pay the 6.25% payroll tax for Social Security, and this payroll cost savings is instead invested in a traditional defined-benefit retirement plan. Their retirement system is their only source of retirement income. Marin firefighters (like most other Marin public employees) are not eligible to receive Social Security. Firefighters do not receive Social Security Fitch Rating Agency recently stated that a 70 Percent funded status or above is adequate and under 60 percent is weak. A pension plan's funded status or unfunded liability is a snapshot in time that can change significantly over the course of a few years, depending on whether the economy and financial markets are strong (better funding) or weak (poorer funding).ĬalPERS currently reports a funded status of about 70 percent funded based on market value of assets, which is regarded by many experts as acceptable. During the great recession, CalPERS dropped to about 60% funded, then rebounded to 73% (in 2014) and continues to rise. By 2000, the system was 130 percent funded. As the economy rebounded, so did CalPERS funding status. Thanks to public pension and health care reforms (some much needed, and some knee-jerk reactions to well-funded Wall Street disinformation campaigns) the risk from unfunded liabilities has decreased further in recent months.ĬalPERS was about 55 percent funded in the early 1980s, following another severe recession. Public retirement plans on average were 86% funded, better than nearly all private pension plans and considered perfectly "healthy" by economists and actuarials.Īs the markets recover, the unfunded liabilities have continued to shrink dramatically. Before the Great Recession, caused by irresponsible Wall Street investments and Big Bankers, the unfunded liabilities were manageable and anticipated. The unfunded liabilities seen over the last decade were caused almost entirely by the decline in the stock markets during the Great Recession. The excessive unfunded liabilities were not caused by firefighters, public workers, or overly generous benefits. Unfunded liabilities in public retirement systems can be a significant problem, however anti-worker groups have created an unrealistic picture of what this means. Here are some facts that tend to be "overlooked" in reports on firefighter retirements, salaries and benefits: "Generous" firefighter benefits did not cause huge "unfunded liabilities" There are many factors that contribute to the enhanced retirement benefits that firefighters have fought for over the past 50 years. Firefighters often retire earlier, and earn a higher percentage of their salary in retirement than many other professions.
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