Like so many other news reports, you fail to recognize two things: (1) to obtain a 90% replacement you need to have 36 years of PERA coverage - the average PERA member retires with 23.3 years of service which would equal a 58% replacement rate. The average retirement income of a PERA retiree is $2,885, hardly the $90,000 per year you give in your example.
(2) The public employees of many of the states listed in your column also have Social Security coverage, thus their retirement income is much greater than you show. ...And for the ones who receive a Social Security benefit because of work outside of the PERA system, they will have a reduction in that SS benefit of up to 50% - so they are penalized for drawing both.
The only fair comparison is to look at what is the total contribution rate of member & employer to SS and pension both, then determine what is the total pension income from both sources. But that is never done in news reports!
Mr. Stapleton neglects to look at the big picture...over the long term. For the 25 years ending in December 2009, the fund returned an average annual rate of return of 9.3%. The return in 09 was 17.4%. Had 2008 not occurred, the average return would be well above 10 percent. The return for 2010 is not available yet because of the valuations of private equity, real estate, venture capital and timberland that still need to come in but it will certainly be greater than 8%. The State Treasurer wants to take us back to the 1950s and early 1960s when pension funds were into "saving" through government bonds, not investing in the worldwide markets. He is wrong in his assessment.
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