IIRC, the crediting rate for the CalPERS Miscellaneous members (including local government agencies) has been 6.5 percent. I worked in the system a little over 10 years. At that time, my employer paid both shares of the contribution - theirs and the employee's.
I left my funds in the account when I quit and they grew nicely. I started drawing the pension in my early 50's, about 12 years after I left. The numbers in my case look like I got a very good deal.
I don't think the deal will be as sweet for those starting out more recently. The employee contribution at my former employer is now paid by the employee and was increased a few years ago to pay for the sweetener that was added in the go go days of the 1990's. That extra 1/2 percent at 55 will probably have to disappear at some point.
Like individuals reaching for yield, CalPERS has taken on riskier investments in recent years. Many of them have not worked out as hoped. Acknowledging that by lowering the anticipated return to 6.5 percent is a necessary but likely inadequate step.
I used to think my parents were very fortunate to get decent social security payments and Medicare when it was a good program that the medical profession liked. Even without their substantial investments, they were set for life. They did not take any money out of their small business retirement plan that was rolled into an IRA until the RMD's hit.
Now I think I'm in the sweet spot, with two government pensions based on rosy assumptions, Social Security on tap, and my investments. My only worry is the quality of health care, which I expect will degrade when I am forced onto Medicare. The succeeding generations will have to deal with the consequences of slow growth and a burgeoning population.
