CalPERS, CalSTRS Report Investments Gains of More Than 18%
On Monday, CalPERS and CalSTRS officials said that the pension funds both earned more than 18% on their investments during the fiscal year that ended on June 30, the Sacramento Bee reports (Kasler, Sacramento Bee, 7/15). CalSTRS is the state's pension fund for teachers.
In May, a report by the California Legislative Analyst's Office found that CalSTRS and CalPERS obligations represent two of the state budget's greatest long-term risks.
CalSTRS still has a $73.7 billion unfunded liability, while CalPERS includes $64.6 billion in liabilities.
The report recommended that CalSTRS be fully funded in three decades. LAO noted that the Legislature could do so through additional state, teacher and district contributions totaling about $5 billion annually by the early 2020s.
Once CalSTRS' unfunded liability is addressed, the report recommended prioritizing CalPERS' $64.6 billion in liabilities (California Healthline, 5/12).
Details of Investment Earnings
This week, CalPERS said it earned 18.4% on its investments in the most recent fiscal year and is now 76% funded. Meanwhile, CalSTRS officials said the fund earned nearly 18.7% on its investments in the most recent fiscal year and is now 67% funded.
The investment gains were significantly higher than the projected 7.5% investment earnings for both pension funds.
In addition, in the most recent fiscal year:
- CalPERS' public stocks rose by 24.8%;
- CalPERS' private equity returns were 20%;
- CalSTRS' public stocks rose by 24%; and
- CalSTRS' private equity returns were 26%.
Overall, CalPERS' portfolio has increased to a market value of $299 billion, and CalSTRS' portfolio has increased to $189.1 billion in value (Sacramento Bee, 7/15).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.