Myth: Police and firefighters retire at age 50 with 90 percent of pay.
CalPERS data indicate that public safety workers who retire at age 50 with a pension that equals 90 percent of their pay represent about 1 percent of all retirees.
A safety worker would have to begin their career at age 20 or younger and work continuously for 30 years, with the highest 3 percent at age 50 benefit formula, to retire at age 50 with 90 percent of pay.
Most safety workers begin their careers in their late 20s, which means they would have to work until their late-50s to accumulate 30 years of service and a pension of 90 percent of their pay, if they have the 3 percent at age 50 benefit formula.
The vast majority of safety employees do not receive Social Security, which means their pension is their only retirement income, other than personal savings.
Myth: The State of California and taxpayers pay the total cost of public pensions.
Investment earnings pay the majority of the costs of public pensions. For every dollar paid in pensions, 65 cents comes from CalPERS investments.
Public employees who are CalPERS members pay a part of their pensions as well. Each month they contribute a percentage of their paychecks toward their pensions. Through collective bargaining agreements negotiated in recent years, State employees pay more toward their pensions - some up to 11.5 percent of each monthly paycheck. This has saved California taxpayers an estimated $400 million per year. In addition, more than 175 local governments have decreased pensions for new hires.
Myth: Pension Costs for the State of
have increased by 2000 percent in the last 10 years.
Fact: This statement compares a time when the State paid little or nothing during years of robust investment earnings and took a pension holiday to the recent market cycle extremes and current economic downturn.
Fact: In 1981-82, pension contributions for the largest category of employees cost the State 19.6 percent of payroll. For the current 2009-10 fiscal year the state is paying 16.9 percent.
Fact: The State of California pays less as a percentage of payroll today than in did in the early 1980s.
Myth: Pensions are among the highest costs of State government.
Fact: Forty-one percent of the State general fund budget is earmarked for public education, 12 percent for higher education, and 10 percent for corrections. The cost of pensions is about 2.5 percent of total State spending
Myth: Increased pension formulas are bankrupting State and local government.
Fact: The downturn in the markets is the cause of greater employer contributions. Even if changes to pension formulas did not exist, CalPERS would need more contributions from employers, due to market losses over the past year. Only a quarter of the cost of State pensions is due to benefit changes of 1999