March 22, 2011

COOKING THE BOOKS ON PUBLIC PENSION EARNINGS FORECASTS. My favorite bit was this:

Actuaries got another rebuff this week when the labor-friendly CalPERS board voted to leave its earnings forecast unchanged, much like a CalSTRS board action in December that did not lower its forecast as far as actuaries recommended.

A lower earnings forecast raises pension costs for state and local governments struggling with budget cuts during a deep recession. But another rate increase also might fuel the drive for pension reforms that increase worker costs and cut their benefits.

“I was afraid we were going to throw gasoline on the fire in the public pension debate,” Neal Johnson of the Service Employees International Union told a CalPERS committee after a key vote.

You’d think a representative of public employees would want to ensure that their pensions are actuarially sound. Instead, the priority is keeping the whole issue from coming to the taxpayers’ attention.

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