Are Your CalPERS Disability Retirement Benefit Safe?
In 2016, a quiet little California town called Loyalton became the focus of public workers’ uncertainties in the California Public Employees’ Retirement System fund when CalPERS pensions for retirees were slashed there. The reason given by CalPERS for the reduction in benefits was that Loyalton had not paid its CalPERS bill in three years.
In early 2017, CalPERS also cut retirement benefits for almost 200 retirees of other local government organizations that had stopped paying into the fund.
Partly due to the recession, in recent years CalPERS’ earnings from its investment portfolio were lower than projected. Governmental agencies were expected to cover the shortfall in order to fund their employees’ pensions. When the city of Loyalton and other municipalities failed to do so, the affected pensions were slashed.
Recent Surveys Show a Growing Lack of Confidence in CalPERS
The effect of these actions shook the confidence in the CalPERS system, which was clearly illustrated by a couple of recent surveys. In 2015, when California public workers were asked if they believed their retirement money was safe, nearly 80% of those responding felt that it was. However, in 2017, just two years later, less than two-thirds of the responses were positive.
A different survey of California public employees showed an erosion of confidence as well. In 2014, 83% of these employees felt their retirement money was safe; but in 2017, that number dropped to 65%.
In 2014 and 2015, CalPERS itself hired a private firm to conduct a survey that included a couple of questions designed to determine whether members worried that CalPERS would have enough money to cover future pension obligations. In both years, those responding to the survey indicated a distinct lack of confidence.
Views Differ Regarding the Viability of CalPERS
These concerns are not altogether unfounded. If CalPERS were to need to pay everything it owes today, it would fall short of funds by 70%. Some critics believe the CalPERS fund is unsustainable. But supporters counter, saying the CalPERS system is on the mend after the recession, and in fact, some critical benchmarks have been met.
Trends seem to indicate that those already receiving CalPERS and CalSTRS (California State Teachers’ Retirement System) benefits have less to worry about than current employees who have not yet retired. In the most recent CalPERS survey, 80% of responding retirees indicated that they felt their retirement money was “safe.” In contrast, merely 65% of current employees voiced similar confidence.
Attorneys Note that New Laws May Help CalPERS Recipients
In October of this year Gov. Jerry Brown signed a new bill into law (SB 1022) that will require government agencies to notify California public workers and retirees if an agency or employer intends to break from CalPERS in a way that would jeopardize retirees’ incomes. While this new law will not entirely solve the problems CalPERS faces, it will at least allow employees time to put pressure on their former employers to remain in the fund or to make a separation payment that would ensure they receive full pensions.
Our Attorneys Can Help You Understand What’s Going On with CalPERS
It is easy to become confused when trying to sift through what all these things mean in terms of your benefits. Our experienced attorneys study the trends, surveys, news articles, and new laws affecting CalPERS carefully. Our CalPERS lawyers are always available to help you understand what the law means in terms of your CalPERs disability retirement benefits, and what course of action you should take.
CalPERs Disability Retirement Attorneys
The disability lawyers at Cantrell Green are among the few attorneys who understand and specialize in CalPERS disability benefits. If you are unsure if qualify for CalPERs disability retirement benefits, call our experienced lawyers today. We would be happy to help you determine your eligibility for disability retirement under the CalPERs system.
This article applies to members of California Public Employees’ Retirement System (CalPERS); and does not reflect the rules, laws or regulations governing how other public retirement systems are administered. If you have question about another public employee retirement system, find your system, below – or call our attorneys at: 562-622-4800
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