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California's Public Employee Retirement Systems Reporting Big Investment Returns

Wikimedia / Vlad Lazarenko
 

Wikimedia / Vlad Lazarenko

The recently ended fiscal year saw California’s two largest public employee retirement funds showing unexpectedly high returns on their investments.

 The California Public Employees’ Retirement System, or CalPRS says it pulled in 18.4 percent in investment income. The California State Teachers’ Retirement system reported about 18.7 percent. Kevin Klowden is managing economist at the Milken Institute, a non-partisan think tank in Los Angeles. He says a higher stock portfolio is a positive sign, but replacing retiring baby boomers with new contributors would help stabilize the pension funds.

“The stock market alone is not going to be the determining factor in CalPERS’ long term success,” he says. “It’s going to help. But, in the end a large portion of it is simply just dealing with the demographics.”

Klowden says CalPERS is still only about 76 percent funded. He says, along with investments, higher contributions from employees and the state will be needed to help close the gap.

The state pension systems took huge losses during the mortgage crisis as real estate investments imploded. 


 

Click here to view a graph of CalPRS' rate of return

 

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