Anyone paying attention knows that public pension costs are climbing, investment returns have been overestimated and the funding in place is inadequate to cover the future costs. This week, courtesy of the Wall Street Journal, we got some up-to-date details
The California Public Employees’ Retirement System, the biggest in the U.S., earned 11.2% in fiscal 2017—largely because of stocks and private equity. But the fund, known by its acronym Calpers, noted that it has just 68% of the assets it needs to pay for future benefits. That is up from 65% in 2016.
“We welcome this fiscal year’s strong returns, but we also remain about 68 percent funded and vulnerable to a downturn in stock markets,” Calpers Chief Executive Marcie Frost said in a statement. The fund has about $332 billion in assets for 1.8 million workers and retirees.
The California State Teachers’ Retirement System, which sits roughly one mile from Calpers in Sacramento, Calif., reported a fiscal 2017 return of 13.4%. The fund’s chief investment officer, Christopher Ailman, touted the number on Twitter as being higher than Calpers: “BOOYAH!!”
This ties to B'game since CalPERS does the investing for city pensions and benefits. Back on July 24th, the Daily Post noted that the pension shortfall for our burg "has swelled to $51.9 million, up 5.3% from two years ago". The city has set aside $3.7 million this fiscal year to use in whatever strategy it chooses to close the widening gap: extra payments earlier--either recurring or ad hoc--or tapping the general fund reserves or borrowing. More to follow as the Council decides.
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