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How many impossible things do you believe before breakfast?
Judging by the gyrations in fund values, it appears as if they're 100% in equities. Too. Gooooooooo Calpers!
The whole story....
http://www.reuters.com/article/marke...47631220090924
Calpers Chief Investment Officer Joseph Dear told the fund's board that the retirement system could be fully funded in 15 years if it posts annual returns of more than 8 percent and contributions grow by more than 4 percent.
The whole story....
http://www.reuters.com/article/marke...47631220090924
Thu Sep 24, 2009 6:52pm EDT
(Adds interview)
By Jim Christie
SAN FRANCISCO, Sept 24 (Reuters) - Calpers, the biggest U.S. public pension fund, launched a website on Thursday to answer critics who say its historic losses have created a financial time bomb and invite a political campaign to rein in its retirement benefits.
"The main purpose is to lay out some of the issues that have been raised ... and to respond to some of the myths," said Clark McKinley, a spokesman for the California Public Employees' Retirement System, or Calpers.
The website www.calpersresponds.com/ is also intended to counter one started by activists at the California Foundation for Fiscal Responsibility here. That site names individuals with annual pensions through Calpers of $100,000 and more at a time when the retirement system tries to recover from steep losses due to market turmoil.
Calpers' investment portfolio, which includes stocks, fixed-income, real estate, private equity and venture capital plays, has been through a roller-coaster ride since last year.
The fund's current assets have shrunk to about $202.1 billion from an October 2007 peak of $260 billion, but are up from a March low of $160 billion, McKinley said.
Calpers' complete second-quarter performance measures are still being compiled. But its initial estimates underscored a big beating: The preliminary value of all its assets at the end of the second quarter stood at $181.0 billion, down from $237.1 billion in the year-earlier period.
THE POLITICS OF PENSIONS
At a July retreat and strategy session for Calpers' board, there was considerable discussion of how the fund can recover from its losses, post annual returns and increase contribution rates from employers.
Calpers Chief Investment Officer Joseph Dear told the fund's board that the retirement system could be fully funded in 15 years if it posts annual returns of more than 8 percent and contributions grow by more than 4 percent.
BlackRock Inc (BLK.N: Quote, Profile, Research, Stock Buzz) Chief Executive and Calpers adviser Laurence Fink told the board that such returns are unrealistic, given the expected slow growth in an economic recovery.
The board also discussed the possibility of a backlash brewing against generous public pensions, fueled by voter anxiety and resentment amid California's double-digit unemployment and private retirement plans having lost so much of their value.
California Governor Arnold Schwarzenegger, in a radio address in July, put Calpers on alert that it could become a fat political target, given the state's wobbly finances.
Schwarzenegger and lawmakers closed a state budget shortfall of more than $24 billion this summer largely with deep spending cuts. State officials widely expect the revenue slump that opened that historic deficit to persist until the state's economy begins to recover from the recession.
"In these challenging economic times, we cannot afford everything we have funded in the past," Schwarzenegger said. "And we will take on pension reform to cut down on unfunded liabilities and save the state billions of dollars."
The California Foundation for Fiscal Responsibility is not waiting for Schwarzenegger. The group is working on its own pension overhaul measure for the November 2010 ballot.
"Our plan is to have a draft within the next couple of weeks," said Marcia Fritz, the group's vice president. She noted its board is debating whether to propose California scrap its defined-benefit pensions and embrace defined-contribution retirement plans similar to private-sector 401(k) accounts.
Fritz said her group is reviewing recent survey results suggesting voters may be willing to back less-dramatic changes to public-sector pensions: "They're more in favor of longer working lives. They think people are retiring too early. And they're in favor of more modest retirement benefits." (Editing by Dan Grebler)
(Adds interview)
By Jim Christie
SAN FRANCISCO, Sept 24 (Reuters) - Calpers, the biggest U.S. public pension fund, launched a website on Thursday to answer critics who say its historic losses have created a financial time bomb and invite a political campaign to rein in its retirement benefits.
"The main purpose is to lay out some of the issues that have been raised ... and to respond to some of the myths," said Clark McKinley, a spokesman for the California Public Employees' Retirement System, or Calpers.
The website www.calpersresponds.com/ is also intended to counter one started by activists at the California Foundation for Fiscal Responsibility here. That site names individuals with annual pensions through Calpers of $100,000 and more at a time when the retirement system tries to recover from steep losses due to market turmoil.
Calpers' investment portfolio, which includes stocks, fixed-income, real estate, private equity and venture capital plays, has been through a roller-coaster ride since last year.
The fund's current assets have shrunk to about $202.1 billion from an October 2007 peak of $260 billion, but are up from a March low of $160 billion, McKinley said.
Calpers' complete second-quarter performance measures are still being compiled. But its initial estimates underscored a big beating: The preliminary value of all its assets at the end of the second quarter stood at $181.0 billion, down from $237.1 billion in the year-earlier period.
THE POLITICS OF PENSIONS
At a July retreat and strategy session for Calpers' board, there was considerable discussion of how the fund can recover from its losses, post annual returns and increase contribution rates from employers.
Calpers Chief Investment Officer Joseph Dear told the fund's board that the retirement system could be fully funded in 15 years if it posts annual returns of more than 8 percent and contributions grow by more than 4 percent.
BlackRock Inc (BLK.N: Quote, Profile, Research, Stock Buzz) Chief Executive and Calpers adviser Laurence Fink told the board that such returns are unrealistic, given the expected slow growth in an economic recovery.
The board also discussed the possibility of a backlash brewing against generous public pensions, fueled by voter anxiety and resentment amid California's double-digit unemployment and private retirement plans having lost so much of their value.
California Governor Arnold Schwarzenegger, in a radio address in July, put Calpers on alert that it could become a fat political target, given the state's wobbly finances.
Schwarzenegger and lawmakers closed a state budget shortfall of more than $24 billion this summer largely with deep spending cuts. State officials widely expect the revenue slump that opened that historic deficit to persist until the state's economy begins to recover from the recession.
"In these challenging economic times, we cannot afford everything we have funded in the past," Schwarzenegger said. "And we will take on pension reform to cut down on unfunded liabilities and save the state billions of dollars."
The California Foundation for Fiscal Responsibility is not waiting for Schwarzenegger. The group is working on its own pension overhaul measure for the November 2010 ballot.
"Our plan is to have a draft within the next couple of weeks," said Marcia Fritz, the group's vice president. She noted its board is debating whether to propose California scrap its defined-benefit pensions and embrace defined-contribution retirement plans similar to private-sector 401(k) accounts.
Fritz said her group is reviewing recent survey results suggesting voters may be willing to back less-dramatic changes to public-sector pensions: "They're more in favor of longer working lives. They think people are retiring too early. And they're in favor of more modest retirement benefits." (Editing by Dan Grebler)