CalPERS and the No Good, Very Bad Year

There are already serious doubts about the veracity of CalPERS’ investment projections and the fate of the state’s unfunded pension liabilities as a whole. To add insult to injury, the nation’s largest public pension just had its worst showing since the height of the last financial crisis.

On July 18, CalPERS announced it had earned a 0.61 percent rate of return on investments for the latest 12-month period. That marks the second year in a row that the agency has failed to meet its target of 7.5 percent. By far.

The news is troubling for state and local governments which will be forced to foot the bill to mitigate shortfalls. It also lends further credibility to increasingly dire warnings about California’s unfunded pension debt.

The pension provider is blaming recent market volatility. But that’s precisely the point, say many critics who have long complained about its heavy reliance on investments.

“It’s important to remember that CalPERS is a long-term investor,” said CalPERS investment committee chair Henry Jones in an attempt to allay concerns. “We will continue to examine the portfolio and our asset allocation.”

Read more about CalPERS poor showing here.