Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Bloomberg Customers

Calpers Earned 1.1% Last Year as Stock Holdings Slumped

The California Public Employees’ Retirement System, the largest U.S. public pension, earned 1.1 percent in 2011 as its stock holdings slumped, said Joe Dear, its chief investment officer.

Global stocks, which compose about half of the fund’s assets, were down about 8 percent during the calendar year. Private equity was up 12.4 percent, as were bonds, while real estate returned almost 10 percent.

The earnings are down from 2010, when the $229.5 billion retirement plan returned 12.5 percent. The Standard & Poor’s 500 index of stocks returned 2.1 percent last year.

“The year was marked by extraordinary volatility,” Dear said at a board meeting today in Monterey. “Overall, we eked out a meager return.”

Rising retiree obligations are straining the budgets of states such as California and cities across the U.S. still grappling with income- and sales-tax revenue slammed by the longest recession since the Great Depression. A weak recovery has churned up a backlash against the pay and benefits of public workers nationwide as taxpayers see their own job prospects and 401(k) retirement funds shrink.

Blunting Annual Swings

In the fiscal year ended June 30, Calpers earned 20.7 percent, its best result in 14 years, led by gains in stocks and private equity. In the first six months of the current fiscal year, the fund is down 4.5 percent, Dear told the board in a report. Calpers assumes it will earn an average 7.75 percent annually to meet its obligations.

The pension fund spreads losses and gains over 15 years to blunt the impact that annual swings may have on the amount of money it charges taxpayers to finance retirement benefits for more than 1.6 million government workers and their families.

Calpers estimates that it has about 70 percent to 75 percent of the money it needs to cover benefits promised to state and local public workers, said Brad Pacheco, a spokesman.

That differs from a Stanford University report released in December that said Calpers was only 58 percent funded. That calculation was based on the fund realizing a 6.2 percent annual return on investments, rather than the 7.75 percent rate used by Calpers.

California’s pensions in 2010 had 80.7 percent of what they needed to pay promised benefits, down from 86.6 percent in the preceding year, according to an annual study by Bloomberg Rankings. The median for all states was 74.6 percent.

California Governor Jerry Brown has proposed cost-cutting reforms to the state’s public pensions, such as raising the retirement age to 67 from 55 for most state employees, forbidding abuses known as pension spiking and double dipping, and adding two outsiders to the Calpers board.

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.