Calpers May Need to Seek Larger Contributions From Employers
2008-11-17 20:58:57.210 by Michael B. Marois Bloomberg
and
States Raise Pension Contributions, Cut Benefits: USA Today
Bloomberg 11/7/08

No asset-liability management (ALM) -- no risk management either, means higher surplus volatility and therefore higher & more volatile contributions (taxes). Raising taxes isn't "mitigation" it's dollar-for-dollar covering one's losses – paying the fiddler for mismanaging. As a pension actuary said to me so eloquently a few years ago, "Public pension funds can’t go bankrupt [insolvent] because they [state & local govt plan sponsors) can just raise taxes!" In the not too distant future this lack of ALM and honest measurement & disclosure of public pension liabilities will mean a zero-sum showdown between taxpayers & pensioners. It will be ugly. There are 78 million 'baby boomers' retiring in the next few years. The ratio of working to dependents (children, retirees, other not-employed) will fall below 1:1.

JRB

11/7/08