Question Every Retirement Article – Including Mine!


Retirees Update

By Tom Moutes, RLACEI Legislative Director

Tom Moutes

As you read articles about retirement, including retirements from LACERS, it is extremely important that you read them with skepticism. The reason for this is that almost all retirement articles have biases. The two most common issues to watch out for are the data within the articles and the source of the articles.

The Data

Sometimes data is true, but cherry-picked. For example, if I told you LACERS retirement benefits used to be 116 percent funded but was only 70 percent funded in 2022, that is a true statement, but I cherry-picked the starting point at the highest funding percentage in LACERS history. It doesn’t tell the whole story – LACERS funding was only at 81 percent in 1990 before rising and then declining. Frequently, authors cherry-pick data starting or ending points to try and make the case for the idea they are putting forward.

If authors want to make the case that public pensions are crumbling, they will deliberately choose data that makes the plans look bad – for instance, going from 116 percent funded to 70 percent — without mentioning that the funding level was only 81 percent before it went up to more than 100 percent for a relatively brief period of LACERS 85-year history.

If authors want to make the case that LACERS is in very good shape, they might say something along the lines of, “Our actuary indicated that we are on-track to be fully funded in 30 years.” First, the actuary backs into the full-funding number, so it’s self-fulfilling. Second, the actuary’s math is based on many assumptions, such as the rate of investment return, number of members, salary increases, deaths, etc. If any one of those assumptions proves inaccurate (as they probably all will prove to be!), then the pronouncement of full funding in 30 years will also likely prove to be wrong. But, full funding in 30 years sounds good!

The Source

Always – let me repeat that – always consider the source of the article. If an article is from an organization that you are not familiar with, look up the organization. Many “think tanks,” even those that claim to be nonpartisan, have definite biases. By checking into the organization, including its sources of funding, you frequently can discover its bias.

If it’s an individual writer, consider his or her position. Many pension articles come from people in the retirement industry, such as investment advisers, actuaries, auditors, pension board members, and consultants. Almost all of them will have biases that will be reflected in their articles.

The purpose of this article is not to make you give up on reading pension-related information, but to give you a few tools to help you see through common biases that are frequently present. So, be skeptical when you read pension articles – even mine!