CalPERS Reports Preliminary 2011-12 Fiscal Year Performance of 1 Percent
SACRAMENTO, CA – The California Public Employees’ Retirement System (CalPERS) today reported a 1 percent return on investments for the 12 months that ended June 30, 2012, falling short of its benchmark that returned 1.7 percent. CalPERS assets at the end of the fiscal year stood at more than $233 billion.
The small gain – despite continued volatility in world markets and economies – was helped by improved performance of CalPERS real estate investments. Investments in income-generating properties like office, industrial and retail assets returned approximately 15.9 percent, outperforming the pension fund’s real estate benchmark by more than 3 percent.
CalPERS performance was negatively impacted by significant allocations to U.S. and international public equities.
“The last twelve months were a challenging period for all investors as the ongoing European debt crisis and slowing global economic growth increased market volatility and reduced equity returns,” said Joe Dear, CalPERS Chief Investment Officer. “It’s a clear reminder that we must remain focused on performance, risk and internal controls in today’s financial environment.”
CalPERS 1 percent return is below the fund’s discount rate of 7.5 percent, a long-term hurdle lowered recently in response to a steady decline in inflation and as part of CalPERS routine evaluation of economic assumptions. CalPERS 20-year investment return is 7.7 percent.
http://www.calpers.ca.gov/index.jsp?bc=/about/press/pr-2012/july/preliminary-returns.xml
They are only funded at 55 to 75% of the amount needed to satisfy actuarial projections at a 7.5% return on investments.
The 1% return or thereabouts is likely to be true for at least several years, since Bernanke and friend are pouring money into the capital markets trying to revive GDP growth.
So the CalPERS fund is pretty much busted.
