ALERT: CALPERS PLANS TO MAKE LOCAL GOVS COUGH UP 50% INCREASE IN CONTRIBUTI​ONS

HELLO ALL, the below story is enough to make your eyes glaze over but bottom line a proposed (trial balloon?) 50% increase for all gov workers state, local, school.   There are a few eye popping quotes in there.  Maybe you should tell them what you think.
“Under the current rate policy, the funding level in 30 years is projected to reach 79 percent for most state workers, 86 percent for most local governments and 82 percent for non-teaching school employees.”
“Even with the proposed new rate policy, the CalPERS funding level has a 52 percent probability of dropping below 50 percent during the next 30 years, according to 1,500 projections of randomly simulated investment returns.”
OK I have been a mathematician all my life.  I love Monte Carlo methods!  Some of the hardest problems I have ever encountered have been solved at least in all practicality by Monte Carlo methods.  But to simplify.  The people who are running Calpers even with their new payment schedule are gambling on the flip of a coin.  Heads (48%) and Calpers wins.  Tails (52%)  and Calpers loses, since it is generally believed that pension funds falling below 50% will never regain viability.  If they do nothing, of course, then the situation will  get much worse.
IS THIS HOW YOU WANT YOUR GOVERNMENT TO FUNCTION?
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
CalPERS gives tentative okay to 50 percent employer rate hike By Ed Mendel | 03/25/13 12:00 AM PST http://www.capitolweekly.net/article.php?xid=11b9xh7kh875n85

The CalPERS board last week tentatively approved an employer rate hike of roughly 50 percent over the next half dozen years, replacing a policy that kept rates low during the recession with a plan to reach full funding in 30 years.

While giving unanimous “first reading” approval to the proposal by Chief Actuary Alan Milligan, the board asked for more information before final approval scheduled next month.

“Any addition to the schools (rate) is likely to result in layoffs to employees,” said the board president, Rob Feckner, who represents the largest group of CalPERS members, non-teaching employees in 1,488 school districts.

Feckner’s request for options for a “longer horizon” for phasing in the rate increase, softening the blow to employers, was joined by Treasurer Bill Lockyer’s representative, Grant Boyken, and board member Michael Bilbrey.

The proposal for a new actuarial method would show state and local government employers the new rate plan in their next annual valuation report. But a five-year phase in of the rate increase would not begin until fiscal 2014-15 for state and school employers.

see also

http://calpensions.com/2013/03/25/calpers-rate-hike-50-percent-over-six-years/

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