Despite a strong January, CalPERS' chief investment officer is warning that the financial markets remain volatile.
Joseph Dear told the pension fund's investment committee Monday that CalPERS still has a ways to go to recover from 2011, when it earned a mere 1.1 percent.
"January was a much better month than the last six months of calendar 2011," Dear said. "It's been good, but we're not home free."
The California Public Employees' Retirement System is under pressure to make more money. The fund is still working to recoup losses from 2008, and the 1.1 percent return was well below the official CalPERS forecast of 7.75 percent.
The lagging returns have helped fuel the debate over retirement costs. Gov. Jerry Brown and Republican lawmakers want to overhaul the system to rein in expenses.
California's other big public pension fund, CalSTRS, earned just 2.3 percent last year. It recently lowered its annual investment forecast a quarter-point, to 7.5 percent, the second reduction in a little more than a year.
Dear said the economy is clearly improving. But he said the European debt crisis or Middle East instability could hurt CalPERS' portfolio.
While CalPERS' stocks had a particularly strong January, "I wouldn't count on a 7 percent gain every month in the equity markets," Dear said.
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