Issues Update
Study Comparing Private and Public Benefits is Flawed; CFFR Proposals Raise Serious Concerns
May 12, 2011
CalPERS has reviewed the report, “Comparing Public and Private Employee Compensation and Retirement Benefits in California,” commissioned by the California Foundation for Fiscal Responsibility (CFFR). CalPERS preliminary review of CFFR’s pension reform proposals raise serious concerns regarding issues of benefit equity and sound, objective methodologies of the study, including:
Equity Issues
- CFFR’s recommendations on retiree health coverage put the financial squeeze on retiree members, and leave spouses and other dependents without coverage after age 65.
- CFFR promotes a “race to the bottom” philosophy, promoting the notion that no one – public or private -- deserves an adequate, reasonable retirement.
- Recommendation to alter pensions for current employees is contrary to the United States and California constitutions.
Flaws of the Study
- The study is based on artificial models and doesn’t use real data.
- Prescribing a discount rate of 6 percent while assuming investments earn 7.25 percent is inherently inconsistent and result oriented.
- The study falls short on specifics and lacks comparative data.
Read the fact sheet.
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