Investments

Issues Update

CalPERS CIO Tells Fox Business News that Pension Fund is Approaching 15 Percent Return
May 9, 2011
Chief Investment Officer, Joe Dear, told Fox Business News recently that CalPERS is approaching a 15 percent annual return going into the last two months of the fiscal year. Dear said two years of positive, double-digit percentage earnings on investment are helping CalPERS close the funding gap opened by the financial crisis and recession. He said total market value is close to $240 billion – only $20 billion short of the Fund’s record and $70 billion more than two years ago. Dear likened public pension liability to the 15- or 30-year mortgage on a house where the typical person focuses on whether he can make the monthly payments – not on how much is still owed to pay off the house. In CalPERS’ case, the Fund is over 70 percent funded with prospects of reaching the 80 percent mark that’s considered healthy for public pension systems.

Rather than attacking the pensions of public workers, Dear says critics should broaden the debate to discuss how the defined benefits that CalPERS retirees receive might be expanded for workers in the private sector. He says CalPERS pays only one-half of one percent on investment fees, which can’t be matched by mutual funds. And he says CalPERS is implementing a new risk-focused allocation plan to protect its earnings when the markets go South.

View the video.








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