CSR Executive Director Phillip Sherwood addresses CalPERS Board

My name is Phillip Sherwood.  I am the Executive Director of the California State Retirees who advocate for nearly 33,000 retired California State employees.

I am here speaking on behalf of President Tim Behrens, who could not be here today.

Ordinarily, when increases in employer and employee pension contributions are discussed, we would be the first to question the need for such increases.  But the current reality shows it is prudent to adjust contributions in light of the updated actuarial assumptions.  Members are living longer.  Hence the long term stability of the fund outweighs knee jerk objections in our estimation.

We know it is very unpopular to suggest increases to contributions.  CalPERS staff should be applauded for stepping forward on this issue.  They have recognized the need for intervention to assure retirement security.

Finally, I would like to share with you a comment from Jon Hamm of the California Association of Highway Patrolmen.  In the most recent Public Retirement Journal, Mr. Hamm sagely points out:

“It is disingenuous that opponents of traditional pensions argue that CalPERS is not being honest with the numbers by assuming too high of a rate of return, yet when CalPERS proposes doing the right thing with their actuarial work, our opponents are going to use it as evidence that pensions are unsustainable. “

Mr. Hamm aptly states this conundrum.  Contribution increases are unpalatable.  But pension fund instability is unthinkable.