CalPERS Reports 12.5% Return on Investments, Beating Expectations
The pension fund reported only a 1% ROI in the previous fiscal year (Kasler, Sacramento Bee, 7/15).
Details of the Announcement
The three most profitable classes for the pension fund during the last fiscal year were:
- Public equities;
- Private equities; and
- Real estate.
The least profitable class was fixed income, which had a 1.6% loss during the fiscal year.
Overall, the fund gained 1.5% more than was expected (Sacramento Business Journal, 7/15).
Details of Unfunded Liability
However, CalPERS still is facing $100 billion in unfunded liabilities over the long term and is expected to increase rates by up to 50% beginning in 2015, according to the Sacramento Bee (Sacramento Bee, 7/15).
In April, the CalPERS Board of Administration gave final approval to an employer rate hike of about 50% that will be phased in over five years. Board members say the change will fully fund CalPERS within 30 years. However, some observers warn that the change will place a greater burden on local governments (California Healthline, 4/18).
Joe Dear -- CalPERS' chief investment office -- said the increased profit is "convincing evidence that CalPERS has the ability to produce good returns on a sustainable basis" (Sacramento Bee, 7/15).
On Monday, Capital Public Radio’s “KXJZ News” reported on CalPERS' profit report (Orr, "KXJZ News," Capital Public Radio, 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.