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The California Public Employees’ Retirement System (CalPERS) has quite the cushy deal. If they have a shortfall, they can simply tell the state and municipalities to make up the difference. This year that will cost the state $3.7 billion. Plus, they just ignored the advice of their own chief actuary and lowered their expected [...] The California Public Employees’ Retirement System (CalPERS) announced a disappointing 1.1% return on their investments for calendar year 2011. By their own estimates, they need to average 7.75% a year to meet current and future obligations to its about 1 million members and 500,000 retirees. Some years, like in 2009 and 2010, they did better [...] Government pensions, including CalPERS and the other public pension plans in California, are permitted to use far laxer accounting standards than private pension plans. This allows them to greatly overstate how much money they have and to understate future liabilities, something which does not bode well for the financial health of the funds or [...] The recent report on CalPERS was scathing in its detailing of alleged corruption, kickbacks and bribes at the highest level. Former CalPERS CEO Fred Buenrostro and board member Alfred Villalobos have already been sued by California, and the attorney in charge of the report says he expects that criminal indictments will follow saying, “It’s [...] In the wake of cratering pension fund returns and the filing of lawsuits against two former top employees, CalPERS, the giant California pension fund, commissioned a report by D.C. law firm Steptoe and Johnson. The report is scathing, saying former CalPERS CEO Federico Buenrostro steered investments by CalPERS to politically connected firms of his [...] In May 2010, then Attorney General and now Governor Jerry Brown filed lawsuits against former California Public Employees Retirement System (CalPERS) board member Alfred Villalobos and former CalPERS CEO Fred Buenrostro for fraud, failure to disclose gifts, and Villalobos bribing Buenrostro to influence CalPERS investment decisions. Villabobos at the time had left CalPERS and earned [...] Attorney General Jerry Brown promises more to come, including quite possibly criminal charges. Today, two former high-ranking CalPERS [the California public pension fund] officials were sued for fraud while acting as placement agents for investment firms wanting CalPERS to invest with them. Alfred R. Villalobos made $47 million doing this. “Villalobos spent tens of [...] Stanford University recently released an analysis of the three big public pension funds in California saying they are woefully underfunded, with a potential shortfall of over $500 billion, much larger than their publicly stated shortfall of $55.4 billion. They based this on assuming a 4.14% return, on what risk-free U.S. Treasuries yield, rather than [...] The U.S. Department of Justice is investigating whether illegal payments were made to employees at California public pension fund giant CalPERS and others to influence where they invested money. This is part of several nationwide probes into many public pension funds. But as CalPERS is the biggest fund, they will get the most media [...] LA Times editorial The state’s obligations are outstripping its ability to pay. Now is a good time to put reforms back on the table. CalPERS estimates this year’s losses at close to 30%. Meanwhile, costs for the current fiscal year are expected to reach $3 billion, of which more than half is to come [...] |  | ||||
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