US - The US$225bn California Public Employees' Retirement System (CalPERS) has dismissed a report on "rapidly escalating" pension costs as "a highly contrived, biased study that fails to show the big picture".
The study, prepared for the Howard Jarvis Taxpayers Association by the Center for Government Analysis, said many funds were struggling under the weight of pension costs and added public funds were in far worse financial condition than just a few years ago.
The study went on to question the disparate earnings between private and public sector workers.
But CalPERS said the report’s conclusions hinged on a “snapshot” view of activity artificially constrained to a period of market downturn and the early stages of its recovery, and added it was “disappointed” a more objective report was not provided.
“The study begins its analysis of CalPERS’ unfunded liabilities when the system was most funded [and finishes at] its least funded point after a three-year downturn in the stock market – the worst since the Great Depression.”
It added the “more complete” record showed an increase in funded status from 81% on 30 June, 2003, to more than 90%.
On the issue of compensation, CalPERS claimed the study unfairly compared the average annual salary of CalPERS members in California to the average California per capita personal income, when a fairer comparison would be to compare workers in similar job categories.
CalPERS information officer Clark McKinley told Global Pensions: “The bottom line is it’s simply apples and oranges – cherry picking data. [This is] a highly contrived, biased study that fails to show the big picture.”
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