CalPERS Pensions vs. Social Security

Employees from schools and local and State agencies were carved out of the Social Security system since the first half of the 20th century.  Instead, they receive public pensions funded by State taxpayers.  This has had material financial implications for school districts and local and State agencies nationwide.  

Here I am focused on the California Public Employees' Retirement System (CalPERS), the largest public pension fund in the US, that manages the pensions for 1.5 million California public employees.  

I also give a close look at the related pension financial burden on the Marin Municipal Water District (MMWD).  This is the Water District where I live.  And, as we shall soon observe the related CalPERS financial burden on the MMWD does not appear sustainable.  This is a concern given that the MMWD needs to undertake major projects to increase its water supply.  These projects would require large bond issuances which could be compromised by the mentioned pension financial burden.  

You can see the complete study at the following URLs: 

Pension study at Slideshare 

Pension study at Slidesfinder 

CalPERS pensions and Social Security are very different on several counts. 

First, Social Security is very progressive.  Higher earners have proportionally far lower pensions than lower earners.  The graph below shows how high earners making $140 K have far lower salary replacement rates than lower earners at any age ranging from retiring at 62 to as late as 70 (the oldest age allowing for accrual of Social Security benefits.    

I calculated all above estimates using a really handy tool.  

Social Security Quick Calculator 

CalPERS pensions do not work like Social Security.  They are not progressive.  Instead, they are neutral.  Their pension salary replacement rate in % is not affected by salary level.  Additionally, CalPERS pensions are a lot more generous than Social Security as shown on the tables below.  Indeed, the CalPERS salary replacement rates are invariably a lot higher than Social Security, regardless of age and salary. 

Another way to measure how much more generous are CalPERS pensions is to look at the multiple of replacement rate (CalPERS divided by Social Security, respective replacement rates).  As shown, on the tables below, CalPERS pensions are 2.5 to 4.1 times as generous as Social Security.  

 Of course such pension generosity does not come free.  And, the majority of the financial burden is on the public employers (ultimately the State taxpayers).  The CalPERS pensions funding requirements on public employers is about 4 times greater than for private employers Social Security funding requirements.

CalPERS projections of employers' funding requirements are highly volatile and sensitive to recent market trends.  Last year, CalPERS forecasted that such funding requirements would rapidly increase over the next few years.  A year later, they completely reversed that trend.  Who knows what their forecasts will be over the next few years.  

If we now focus on the MMWD, we can observe that the CalPERS financial burden does not appear sustainable. 

From 2015 to 2021, the MMWD pension contribution rose very rapidly from 23.3% to 38.7% of payroll.  Yet, these increases in pension contributions were not enough as the related unfunded pension liabilities kept on rising from 13.4% of the balance sheet in 2015 to 18.8% in 2021. 

If public employees would have remained within the Social Security system, the MMWD's finances would be in far better shape nowadays.  The table below compares the actual MMWD's financial condition in fiscal 2021 with CalPERS pensions vs. what it would be if its pensions were within the Social Security system.  As can be seen on all specific counts of financial conditions, the MMWD would have been far better off with the Social Security system.  It has no choice in this matter.  But, it is interesting to uncover the drastic difference in the financial burden of the two very different pension systems.   

How to measure your blood pressure

Why blood pressure measurements at your doctor's office are imprecise

The blood pressure measurements you get at a doctor's office may not be representative because:

1) In a doctor's office you are nervous, and that can cause blood pressure to spike;

2) They typically take just one single reading.  Blood pressure is volatile.  You need to take at least 3 measurements and take the average to derive a more representative measure of blood pressure; 

3) It is critical to take the blood pressure on each arm.  The blood pressure in each arm is different.  And, this difference is informative.

Blood pressure standards.  The ones from the NHS are pretty good

Unlike American standards, the UK's NHS does not go crazy the minute your blood pressure is over 120/80.  Also, the NHS is concerned about low blood pressure.  American standards typically are not, a material omission. 

So, here are the NHS blood pressure standards.

Take 3 measurements in each arm, and observe the difference between arms

Next is an example of a basic blood pressure reading (3 measurements in each arm, and calculating the difference between the arms, and the averages). 

 The above overall average blood pressure is 130/83 which falls within normal range (NHS).  When we look at the data for each arm, we notice a very large difference between the two arms.  It turns out that this difference is very informative.  The table below discloses the interpretation of this difference.

The difference between the arms tells you what type of cardiovascular condition the patient may have, what event he may incur, and what is the location of the blocked vessels (the side with the lower blood pressure).  

When I use "may" it indicates the statement is uncertain.  It is not deterministic.  But, the blood pressure measurements inform the cardiologist on what test to conduct to confirm the presence of the mentioned condition.   

Next, look at the difference between Systolic and Diastolic pressure

The difference between the systolic and diastolic pressure is called Pulse Pressure (PP).  The ratio of the PP divided by the systolic pressure (PP/S) is also of interest.  Let's take an example. 

The table below discloses the interpretation of the PP metrics.  Notice the frequent use of "may" conveying uncertainty.  However, it suggests the PP information can raise hypotheses regarding numerous cardiovascular ailments.

The described patient has good pulse pressure measurements which do not raise explicit concerns. 

You may also consider observing the difference between arm and ankle blood pressure

The difference between your arm and ankle blood pressures is the ankle-brachial pressure index (ABPI).  This measurement requires special equipment conducted in a doctor's office.  For more detail on this test, check Wikipedia.  

Nevertheless, I would venture that taking 6 measurements at home (without the precise equipment) may be as representative as taking one single measurement at a doctor's office.  

See below the table interpreting the ABPI (source: Wikipedia). 

An ABPI between 0.90 and 1.29 is considered normal, free from peripheral vascular disease (PVD), while a lesser than 0.9 indicates arterial disease.   

An ABPI of 1.3 or greater is high, and suggests calcification of the walls of the arteries and incompressible vessels, reflecting severe PVD. 

How about the plain Pulse Rate... It is about Atrial Fibrillation

Blood pressure monitors disclose the pulse rate (heartbeat per minute).  On a stand alone basis, it is not informative.  However, the pulse rate is the marker for atrial fibrillation (A-fib), irregular, and rapid heartbeat.  If left untreated, it can lead to serious cardiovascular events and cognitive impairment.  For more details on A-fib, go to Wikipedia. 

 

So, how can you test yourself for A-fib?  Anyone who has a Fitbit, Smartwatch, or Oura ring can observe their pulse rate trend throughout the night.  Any spiking deviation in pulse rate will be readily noticeable.  And, it may suggest one has A-fib.  During the day, such measurements are less precise because any activity readily affects our pulse rate.