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Biggest pension funds record steep losses

July 22, 2009

The FT reports – Biggest pension funds record steep losses

The California Public Employees’ Retirement System (Calpers) and the California State Teachers’ Retirement System (Calstrs) were hit by the real estate slowdown and the slump in global equities. Calpers said the fall in the value of its assets was the most severe in its history.

This is what happens when you gamble.  Calpers was much more aggressive than other pensions and even doubled down in 2008!! Read more in the WSJ article: Risky, Ill-Timed Land Deals Hit Calpers.

More from the FT article…

The value of Calpers assets fell 23.4 per cent for the year to June 30, raising concerns that state employees and local governments might have to increase their contributions to cover the shortfall.

But Calpers presented a bullish view. “The system has more than enough cash through contributions and income from investments to meet our present liabilities, so we are in a good position to ride out the current downturn and come out stronger,” said Mr Dear.

Of course Mr. Dear will make such claims.  Note that he says nothing about future liabilities, which Calpers will certainly not be able to meet. Calpers will make such claims right up until they ask for federal help.

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