CalPERS loses $24.9 billion but stays strong/NCTimes
October 1st, 2008http://www.nctimes.com/articles/2008/09/30/business/z3c8e31e8925b260a882574d0005d1e37.txt
“On Monday, a dive in the stock markets wiped out $7.8 billion of the pension fund’s investments.”
“In order to pay for workers’ retirements, the fund needs to earn 7.75 percent each year. That means if losses continue to mount, the fund might need to increase the contributions cities make into the pension fund.”
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Hi Ann,
How many MSJC employees are with CalPERS?
My teacher’s pension is held by CalSTRS, and here is what the STRS website currently has to say:
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CalSTRS Pension Program Built to Withstand Market Fluctuations
Recently there have been some historic changes on Wall Street that may have raised concerns about CalSTRS investments and benefits.
The current Lehman Brothers and AIG difficulties do not have a negative impact on the $155 billion CalSTRS portfolio, partly due to the limited amount invested in these companies, $216 million. Also, the CalSTRS investment portfolio is strong and built to withstand any fluctuations in the financial markets.
CalSTRS Investment Strengths
1. Diversified assets: U.S. stocks, international stocks, bonds and other fixed income securities, real estate and private equity invested throughout the globe
2. Patient, long-term investor who invests based on the long view
3. A professional investment staff who use some of the best money managers in the world
CalSTRS A Well Funded Pension Plan
1. Over the last three years CalSTRS achieved an average return of 9.72 percent, which exceeds the 8 percent average annual return needed to meet long-term benefit liabilities.
2. At 88 percent, CalSTRS’ long-term funding status puts it among the soundest pension funds in the nation. A 2007 Pew Charitable Trusts report calls 80 percent ‘healthy.’
CalSTRS pension benefits are safe from these market fluctuations as it is a Defined Benefit Program and the lifetime retirement benefits are guaranteed by law.
Hey John,
Classified are under PERS and the President of CSEA (State Association) is also the President of PERS. I met with him this weekend and recieved his assurance that the investments of PERS are very well diversified and the money lost will have no long term impacts because of previous gains.
Sounds very similar to what you’ve stated above with STRS.