[bkopto]

And the hits just keep on coming. Good luck CA government and taxpayers.

[headstamp 2]

They divested from Israel and gun companies didn’t they?

I guess the windmill factories aren’t paying too well these days.

[2banana]

Don’t worry - taxpayers will make up any shortfalls of the insane public union pensions...

[Graybeard58]

CalPERS assumes that, in the long-term, it will earn investment returns averaging 7.5% a year.

###############################################

Way too high for this Obama economy.

[Seaplaner]

If I understand correctly, much of the CalPERs board is made up of union creeps; and if so, might a full, complete, and public audit of their investment choices and rationale be in order?

[aynrandfreak]

They should just do indexing and fire the crony advisors making hundreds of millions or more per year.

[Revel]

This is what happens when the Federal government wants to keep interest rates so low so that they can keep borrowing more money. It also what happens when bankers want to use other peoples money to get rich without paying anything for the privilege.

[Dads Bag]

Cal-PERS lost 9 million dollars in a now failed Greek hedge fund managed by none other than Hillary Clinton's son-in-law. Put another way, the Clinton extended family picked up 9 million dollars from Cal-Pers.

[I am Richard Brandon]

If The Fed says 0% interest - zero it is. Deal with it.

[Vince Ferrer]

The Federal Reserve is the culprit here. Pension funds invest in a lot of fixed income securities. In fact they are often limited in what they can invest in. Currently the fed rate is so low that no one can make money on fixed income. As long as the Fed holds down rates, pension funds will continue to go bust.

This is the exact issue of why institutional investors in 2007-2008 bought risky investments like subprime mortgages, packaged up into bonds that were declared to be AAA, even though everyone knew they were tremendous risks. Interest rates had been falling since 1981, and they had to keep chasing higher returns. This meant adding risk.

[VanShuyten]

I’ll be right there when the state has to start selling things like art, parks, state senate office furniture...

[umgud]

They need to get on the Trump bandwagon quick.

[cgbg]

The shortfall of 7% will compound every year unless the fund makes over a 7.5% return next year.

This is what the “financial advisors” aka scam artists never tell you when you have a bad year.

The shortfall should be collected from California taxpayers now—but don’t sit and wait for that to happen.

[DesScorp]

They know Uncle Sugar will bail them out.