CSEA Chapter 767

Fellow CSEA members, both active and retired (as well as our staff), I feel the need to take a minute of your time to address the current stock market situation and how it affects your retirement. Your retirement is SAFE and SOUND. Yes, we at PERS have seen losses in the portfolio, however we are well diversified and poised to handle the down turn while also being in a great position to take advantage of opportunities as the market turns upward.

First of all, being a defined benefit plan as we are, your retirement is unaffected. As for the system itself, we are well positioned through diversification to handle the flex of the market. The market downturn early in the 2000's caused us to lose $50 billion, but since that time we have made back over $130 billion.

To date PERS has dropped a little under $25 billion during this weakening of the market, but relatively speaking that was out of a portfolio of close to $250 billion.

This also gives me an excellent opportunity to reinforce the importance of defined benefit pensions, as opposed to the defined contribution plans advocated by former Assemblyman Richman and other legislators both in California as well as the White House. Think about the impact on people’s retirement if the administration (both current and proposed) were successful in “privatizing” Social Security as the stock market plunges. The federal government would then be dealing with Social Security as a 401k plan, and you know what those are doing these days.

The following is a quote from the CalPERS web page: “As you know, the capital markets have been the subject of much change in the last week. While the news of the markets can be understandably concerning, it is important for our members to know that retirement benefits are securely protected by law and not directly affected by the current credit crisis or on our ability to pay benefits. We are monitoring the Fund’s exposure to the financial sector and identifying emerging buying opportunities. Our diversified portfolio will help weather the storm as it did during the last recession.”

The most important point for you to understand and to share with your fellow members is that your retirement is now, and will continue to be, safe and sound.

Remember, you elected me to the PERS Board. Please don’t ever hesitate to ask me if you have concerns.

In strength and Unity,

Rob Feckner

Association President, California School Employees Association
President of the CalPERS Board of Administration