Higher Pension Contribution Targets Threaten Financial Health Of California Cities

While most American millennials are worried about the spiraling cost of college education, at the other end of the age spectrum the pensions debate rages with equal ferocity. Nowhere is this crisis more acute than in California where the California Public Employees Retirement System or CalPERS is struggling to cope. Once more than 100% funded, CalPERS has severely undershot its annual investment return target of 7.5% in recent years, and now, it has scarcely 2/3 of what it needs to cover all pension promises. The fund, which is supposed to invest state employees’ retirement funds in a responsible way, lost…