December 19, 2011
“In a feisty farewell last week, an outgoing CalPERS board member, Lou Moret, called attention to the below-median earnings as Wilshire consultants delivered a quarterly earnings report.
“Is this as bad as it looks?…We are glossing over this, and it looks horrible,” said Moret.
“The report shows CalPERS earnings during the last 10 years, 5.4 percent, slightly below the Wilshire median for large funds, 5.7 percent, and a broader Wilshire median for institutional investors, 5.5 percent. The CalPERS earnings for the last three years, 2.2 percent, are well below the three-year median for the two Wilshire measurements, 4 and 4.2 percent….Moret said it’s a problem if a CalPERS failure to take corrective action results in “giving the state a bigger number they have to come up with,” a reference to annual employer (taxpayer) pension contributions.””
CalPERS began their FY 2011-12 on July 1, with 237.5 billion in assets. Current assets are 220 billion. That is 17.5 billion more dollars taxpayers are responsible to cover, plus the ROI that they aren‘t earning on the taxpayer guaranteed 7.75% rate of return.