The State Worker

Chronicling civil-service life for California state workers

November 20, 2008
CalPERS, LAO respond to Forbes article

We called out a comment by one investment expert quoted in this piece speculating that CalPERS could be "the next shoe" to drop in the global economic crisis.

The Forbes piece drew swift reaction from fund spokeswoman Pat Macht. Here's what she said in an e-mail this afternoon:

Two words for the Forbes article: Conjecture. Baseless.

CalPERS has more than enough money to pay benefits. It has never missed a payment in 77 years, not even during the Great Depression.

Forbes need only go to the S&P to get independent confirmation. Last week S&P re-certified CalPERS with the highest rating of liquidity. Just because the markets are down doesn't mean CalPERS can't weather it: We have short term tactics and long term strategies for investing and we have a long term investment horizon so we can afford to wait for the markets to recover. We aren't focused on the daily Dow number. The most improtant numbers to us are long term returns.

For the last 25 years we have had a positive return with an average of 16 percent return; we have had paper losses in five (averaged -3.8 percent). We are still way ahead of the game. Downturn in market values are concerning, but based on history of at least a half dozen downturns in 77 years, it is possible to overcome, given time. We have the right people, the right tools and the world's best investment minds navigating through the general financial markets' extraordinary conditions.

The rain falls on the just and unjust alike, and while the overall market conditions are unnerving, we are resilient and confident in our ability to protect our members' retirement security.

Jason Dickerson, who tracks all things state worker for the LAO, passed along this information:

I noticed the comment at Forbes' Web site too.

Even after mammoth investment losses, CalPERS reports having $176.2 billion worth of assets in its portfolio. According to CalPERS' audited financial statements, the Public Employees' Retirement Fund -- its main pension trust -- paid out just $10 billion in benefits in 2006-07 and had just hundreds of millions of dollars of other expenses. (See Comprehensive Annual Financial Report [CAFR], page 15.)

Other CalPERS defined benefit pension funds paid out under $200 million (CAFR, p. 19). In fact, CalPERS-wide, total benefit payments, refunds, administrative expenses, withdrawals, and other expenses from fiduciary funds totaled under $11 billion in 2006-07 (CAFR, pp. 34-35), and operating expenses of self-funded proprietary accounts (not funded from the same accounts as pensions) totaled under $2 billion (CAFR, p. 37).

There are serious funding issues that the state and local governments will need to address related to CalPERS in future years, but the specific comment you cite from Forbes has no basis in reality whatsoever.

About Comments

Reader comments on are the opinions of the writer, not The Sacramento Bee. If you see an objectionable comment, click the "report abuse" button below it. We will delete comments containing inappropriate links, obscenities, hate speech, and personal attacks. Flagrant or repeat violators will be banned. See more about comments here.

What You Should Know About Comments on is happy to provide a forum for reader interaction, discussion, feedback and reaction to our stories. However, we reserve the right to delete inappropriate comments or ban users who can't play nice. (See our full terms of service here.)

Here are some rules of the road:

• Keep your comments civil. Don't insult one another or the subjects of our articles. If you think a comment violates our guidelines click the "report abuse" button to notify the moderators. Responding to the comment will only encourage bad behavior.

• Don't use profanities, vulgarities or hate speech. This is a general interest news site. Sometimes, there are children present. Don't say anything in a way you wouldn't want your own child to hear.

• Do not attack other users; focus your comments on issues, not individuals.

• Stay on topic. Only post comments relevant to the article at hand. If you want to discuss an issue with a specific user, click on his profile name and send him a direct message.

• Do not copy and paste outside material into the comment box.

• Don't repeat the same comment over and over. We heard you the first time.

• Do not use the commenting system for advertising. That's spam and it isn't allowed.

• Don't use all capital letters. That's akin to yelling and not appreciated by the audience.

You should also know that The Sacramento Bee does not screen comments before they are posted. You are more likely to see inappropriate comments before our staff does, so we ask that you click the "report abuse" button to submit those comments for moderator review. You also may notify us via email at Note the headline on which the comment is made and tell us the profile name of the user who made the comment. Remember, comment moderation is subjective. You may find some material objectionable that we won't and vice versa.

If you submit a comment, the user name of your account will appear along with it. Users cannot remove their own comments once they have submitted them, but you may ask our staff to retract one of your comments by sending an email to Again, make sure you note the headline on which the comment is made and tell us your profile name.

hide comments
blog comments powered by Disqus

About The State Worker

Jon Ortiz The Author

Jon Ortiz launched The State Worker blog and a companion column in 2008 to cover state government from the perspective of California government employees. Every day he filters the news through a single question: "What does this mean for state workers?" Join Ortiz for updates and debate on state pay, benefits, pensions, contracts and jobs. Contact him at (916) 321-1043 and at


Now on the State Worker column

    [an error occurred while processing this directive]

State Pay Database

This database allows you to search the salaries of California's 300,000-plus state workers and view up to four years of their pay history.

Latest Capitol Alert headlines

    404 - Not Found - The Sacramento Bee, Sacramento, California

    404 Not Found

    Our apologies....

    We can't find the page you requested in this location.

    The story may have moved or expired.

    You may wish to:

  • » More on the Capitol Alert blog


May 2013

Sun Mon Tue Wed Thu Fri Sat
      1 2 3 4
5 6 7 8 9 10 11
12 13 14 15 16 17 18
19 20 21 22 23 24 25
26 27 28 29 30 31  

Monthly Archives