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Calpers Generates 1% Return, Misses Discount Rate Target By 87%

Tyler Durden's picture




 

"Thank you ZIRP, may we have another." This is what the 1.6 million workers who have invested their retirement money with America's largest pension fund, California's CALPERS, may want to ask Chairman Ben following the firm's just announced results for Fiscal 2012 (ended June 30). The end result: +1% nominal return, which means a negative real return. And this is even including the now traditional end of June ramp which this year came courtesy of the now largely irrelevant European summit, which nonetheless ramped stocks and likely meant the difference for Calpers between positive and negative on the year! Sadly just one "another" year would not be enough, but a whopping 7 more would be needed, because as is well known, for all actuarial purposes Calpers, as well as the bulk of US pension funds, use a 7.5% discount rate. In other words, Calpers missed the minimum return it needs to not require overfunding by, oh... 87%. Here is Calper's Mea Culpa: "CalPERS 1 percent return is below the fund’s discount rate of 7.5 percent, a long-term hurdle lowered recently in response to a steady decline in inflation and as part of CalPERS routine evaluation of economic assumptions." At this rate, courtesy of ZIRP and the destruction of equities as an asset class, until the 2s30s is flat, and we have terminal wheelbarrow lift off, Calpers will no choice but to keep revising lower and lower until its discount rate is negative in line with the imminent advent of NIRP. Good luck with those actuarial tables with a negative discount rate.

From Calpers:

The California Public Employees’ Retirement System (CalPERS) today reported a 1 percent return on investments for the 12 months that ended June 30, 2012, falling short of its benchmark that returned 1.7 percent. CalPERS assets at the end of the fiscal year stood at more than $233 billion.

 

The small gain – despite continued volatility in world markets and economies – was helped by improved performance of CalPERS real estate investments. Investments in income-generating properties like office, industrial and retail assets returned approximately 15.9 percent, outperforming the pension fund’s real estate benchmark by more than 3 percent.

 

CalPERS performance was negatively impacted by significant allocations to U.S. and international public equities.

 

"The last twelve months were a challenging period for all investors as the ongoing European debt crisis and slowing global economic growth increased market volatility and reduced equity returns,” said Joe Dear, CalPERS Chief Investment Officer. “It’s a clear reminder that we must remain focused on performance, risk and internal controls in today’s financial environment.”

 

CalPERS 1 percent return is below the fund’s discount rate of 7.5 percent, a long-term hurdle lowered recently in response to a steady decline in inflation and as part of CalPERS routine evaluation of economic assumptions. CalPERS 20-year investment return is 7.7 percent.

 

“It’s important to remember that CalPERS is a long-term investor and one year of performance should not be interpreted as a signal about our ability to achieve our investment goals over the long-term,” said Henry Jones, Chair of CalPERS Investment Committee.

And here is why equities are pretty much finished as an asset class for pension funds:

Today’s announcement includes asset class performance gains as follows:

Finally, here is where Calpers affiliates will not be happy:

Employer contribution rates that use CalPERS 2011-12 fiscal year investment performance will be calculated based on audited figures and will be reflected in contribution levels for the State of California in FY 2013-14 and for contracting cities, counties and special districts in FY 2014-15.

Advance warning: contribution rates are going up, up, up.

 

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Mon, 07/16/2012 - 15:40 | 2621341 transaccountin
transaccountin's picture

decline in inflation

mmmmmmmk

Mon, 07/16/2012 - 15:48 | 2621376 Uber Vandal
Uber Vandal's picture

I found an old ticket of a train ride on the Algoma Central Agawa Canyon that my girlfriend and I took in 2002. The cost per person on the ticket was $58 CDN.

10 years later, I looked up the cost of going on that ride again, and the price is now $153.75

No inflation here at all.

Mon, 07/16/2012 - 16:01 | 2621427 Popo
Popo's picture

Props to Tyler for today's coffee-spitter from the post summary:   "Wheelbarrow liftoff".

Someone pass me a napkin.  Hilarious.

Mon, 07/16/2012 - 16:04 | 2621450 Popo
Popo's picture

I found a visual description for Calpers' performance here:

http://www.youtube.com/watch?v=zPfm-sUbYUI

Tue, 07/17/2012 - 09:40 | 2621949 FEDbuster
FEDbuster's picture

Maybe they should take a couple percent of their book and buy MegaMillions and Powerball tickets each week?

Mon, 07/16/2012 - 18:03 | 2621965 smlbizman
smlbizman's picture

the answer is simple......we need more months in a year, 12 is just not enough time for these guys to get it done.....lets start by making a year 18 mos. their returns would improve ,people wouldnt live as long and payouts probably would be made to very few....

Mon, 07/16/2012 - 17:28 | 2621822 GeezerGeek
GeezerGeek's picture

Try measuring the prices of that ticket in silver or gold.

Mon, 07/16/2012 - 16:41 | 2621346 Bam_Man
Bam_Man's picture

The end of the Great Bond Bull Market will come when the insurance companies & pension funds HAVE TO SELL (whether they want to or not) to raise CASH to pay out contractually promised benefits. And the demographics suggest that they will probably all have to start selling at roughly the same time. Once this process begins, Game Theory dictates that it will quickly gain momentum and be quite a sight to see.

Mon, 07/16/2012 - 22:33 | 2622845 Bringin It
Bringin It's picture

No worries - [JPI] Just Print It.  Solves everything.

Mon, 07/16/2012 - 15:42 | 2621350 buzzsaw99
buzzsaw99's picture

they will never get their money back out.

Mon, 07/16/2012 - 15:59 | 2621410 azzhatter
azzhatter's picture

cut pensions by 87%

Mon, 07/16/2012 - 16:01 | 2621426 El Oregonian
El Oregonian's picture

Welcome to ALPO World CaliWorkers, If you heat it up to 127 degrees and you close your eyes while eating it, it can faintly remind you of sloppy joe's.

Mon, 07/16/2012 - 16:03 | 2621443 pods
pods's picture

Bullish for Texas Pete's!

Mon, 07/16/2012 - 18:22 | 2622025 TheFourthStooge-ing
TheFourthStooge-ing's picture

It's barbecue season, so throw a few Gaines-Burgers on the grill.

Mon, 07/16/2012 - 18:34 | 2622057 Jay Gould Esq.
Jay Gould Esq.'s picture

Pods -- Habanero Tabasco.Texas Pete's is bootstrap molasses in comparison.

It's all about the Scovilles.

Mon, 07/16/2012 - 15:44 | 2621359 HD
HD's picture

If they had any balls they would blame Ben and Zirp and tell their clients to get used to it...

Mon, 07/16/2012 - 15:50 | 2621384 LMAOLORI
LMAOLORI's picture

 

Well actually as much as I think the public unions are fleecing the taxpayers they would probably have a case with Libor being manipulated

The $800 Trillion Scandal: How Banks' LIBOR Lies Affected You

Pension funds, furthermore, routinely hold income-generating securities in which payments are based upon LIBOR. 

in full

http://www.dailyfinance.com/2012/07/09/the-800-trillion-scandal-how-banks-libor-lies-affected-you/

Mon, 07/16/2012 - 15:44 | 2621360 ghostfaceinvestah
ghostfaceinvestah's picture

More evidence that ZIRP is a zero sum game - from creditors to debtors.

Mon, 07/16/2012 - 15:45 | 2621361 LMAOLORI
LMAOLORI's picture

 

At least they have the high speed rail (sarc)

HIGH SPEED RAIL ADVOCATES DISCREDIT THEIR CAUSE - AGAIN

Mon, 07/16/2012 - 15:45 | 2621362 ptoemmes
ptoemmes's picture

“It’s important to remember that CalPERS is a long-term investor and one year of performance should not be interpreted as a signal about our ability to achieve our investment goals over the long-term,” said Henry Jones, Chair of CalPERS Investment Committee.

 

I suppose it woud be fair to ask what the last 3 and 5 year return has been?  OK - do a 10 year too if available.  I would if I knew where to look - figure someone here has it at their fingertips.

Mon, 07/16/2012 - 15:54 | 2621395 francis_the_won...
francis_the_wonder_hamster's picture

They do a great job of hiding the investment returns in their annual reports.  Just Google "calpers investments and download the PDF.  I'd post the numbers, but don't want to rob you of the enjoyment of scrolling through the freakin thing to find the one bit of information that everyone should want at the top.  They do a great job of showing how their balances have grown, they just hid the IRR.

Calsters does a better job.

Mon, 07/16/2012 - 16:29 | 2621601 sdmjake
sdmjake's picture

Here ya go:   http://www.calpers.ca.gov/eip-docs/about/facts/investments.pdf

TOTAL Return for 5 yrs ended 3/31/12 = 1.2%

TOTAL Return for 10 yrs ended 3/31/12 = 5.7%

That ain't working out nearly as well as they are actuarially anticipating...good luck with that...

Mon, 07/16/2012 - 16:45 | 2621656 ptoemmes
ptoemmes's picture

Thanks - I did try ;-)

Francis was right!

 

Bet it ALL on black.

 

Mon, 07/16/2012 - 15:46 | 2621369 Ineverslice
Ineverslice's picture

Missed it by that much....

Mon, 07/16/2012 - 15:46 | 2621372 narnia
narnia's picture

the last step for financials this year:  solve for 1% positive return by plugging arbitrary real estate return (15.9% my ass)

Mon, 07/16/2012 - 15:47 | 2621374 Kaiser Sousa
Kaiser Sousa's picture

It's all good...we rich here n California...
Just watch out for all the pot holes that r more like fox holes...
fuck calpers and all those "pay me" guvment workers...
Sick of all this bullshit.....

Mon, 07/16/2012 - 15:53 | 2621391 HD
HD's picture

Indeed. It's my understanding that California has more "bounce" than all us all combined. So they have that going for them...

Mon, 07/16/2012 - 16:10 | 2621486 SemperFord
SemperFord's picture

I agree, don't drive down the Gateway to LAX/ Century BLVD, I have been in third world countries with dirt roads smoother than Century! I feel bad for my bilstein shocks :(

Mon, 07/16/2012 - 15:47 | 2621375 FubarNation
FubarNation's picture

You have to be wondering of these big pension funds are starting to shit their pants.  If I were a member I'd be cashing out quick like.

Do they really think they will be solvent in the next 5-10 years?

Mon, 07/16/2012 - 19:44 | 2622246 SmittyinLA
SmittyinLA's picture

A. Big pension funds have neither shit nor pants.

B. the people that run the fund have separate fully funded private pensions. 

C. the fund pensioners would if they could cash out, they can't. 

D. the people that appoint the fund managers have their own separate fully funded privately controlled pension-which isn't invested in MBS or even invested in America for that matter. 

Mon, 07/16/2012 - 15:50 | 2621381 youngman
youngman's picture

Revenues are down..but expenses are going up......not a good combo..but of course California is on the hook for the cost overruns...its in their constitution....so down down down it goes....but I am SURE the Federal Politicians will come in to save them...a state that is to big to fail....

Mon, 07/16/2012 - 15:54 | 2621396 cossack55
cossack55's picture

Psssstttttt! Hey, buddy. Heres a tip. If you ever see or hear the word "california",,,,RUN.  Pass it on.

Mon, 07/16/2012 - 16:32 | 2621612 sdmjake
sdmjake's picture

LMAO - thanks Cossack...ain't that the truth!

Mon, 07/16/2012 - 17:35 | 2621846 GeezerGeek
GeezerGeek's picture

I'd vote in favor of giving California back to Mexico. It'd serve Pelosi, Boxer and Feinstein right, not to mention all those Hollywood elites.

Mon, 07/16/2012 - 20:01 | 2622293 SmittyinLA
SmittyinLA's picture

Actually the Mexicans prefer it remain CA, where they can rape and pillage their neighbors, what goes on in CA doesn't occur in Mexico and wouldn't be tolerated-in spite of their lack of gun rights. 

 

Mon, 07/16/2012 - 15:50 | 2621382 lizzy36
lizzy36's picture

Their CIO get a $475K base and up to another 75% of that in bonus depending on performance.

Wonder how much Calpers paid out in fees from Jan to June for that 1% return.

Would have been better buying the 10 year and gold.

Fucking muppets.

Mon, 07/16/2012 - 20:10 | 2622309 SmittyinLA
SmittyinLA's picture

probably about a half a percentage of the assets, I dunno about Jan to- June 2012, but from a  2010 article http://www.efinancialnews.com/story/2010-12-14/calpers-fee-review

"Calpers has more than $200bn in assets and paid $929m in active investment-management and performance fees in the fiscal year ended June 30".

So fees back in 2010 were around 1/2% of the assets.

The state claims to have made a fee structure reform, so fees NOW are probably 1 or 2%-(but better hidden)

Mon, 07/16/2012 - 15:53 | 2621390 bidaskspread
bidaskspread's picture

Does the 1% assume the settlement amount that they are going to claim for LIEBOR?

Mon, 07/16/2012 - 15:57 | 2621404 zero19451945
zero19451945's picture

Pension administrators need to start talking up against Bernanke.

It is negligence on their part for not doing so.

Mon, 07/16/2012 - 15:58 | 2621406 Joe Davola
Joe Davola's picture

That cesium GW is talking about can't reach the west coast soon enough.

Mon, 07/16/2012 - 15:58 | 2621407 centerline
centerline's picture

Funny.  Just a few years ago it was taboo to talk about pensions and munis.

Mon, 07/16/2012 - 16:00 | 2621413 Everybodys All ...
Everybodys All American's picture

CNBC talking heads are starting to lose it ... I think it's funny. They know how f'd up the charade is and are starting to find it harder every day to mask their disgust.

It's still subtle. But, it's definately different in the fact that they are not all 100% running in the same direction like we've seen for the last three yrs.

Mon, 07/16/2012 - 17:24 | 2621807 insanelysane
insanelysane's picture

Their viewership is down, partly because no one wants to invest in the rigged game with the banksters and hft-ers and partly because unless you are one of the sheeple you aren't buying any of the crap they had been trying to sell for the last 3 1/2 years.

Mon, 07/16/2012 - 17:28 | 2621816 stocktivity
stocktivity's picture

They're all worried cause ratings on CNBC are way down. I've been watching Fox Business more and more...they aren't paid cheerleaders and the women are hotter. I can see why Melissa Francis left CNBC and moved over there. They can speak their minds and call a spade a spade.

Mon, 07/16/2012 - 18:33 | 2622052 Larry Dallas
Larry Dallas's picture

Fox Business has the 2nd best set of tits in the business, Liz Claman. She knows it too. Everything else is blonde hair and gratuitious leg views.

But sadly to say, Calpers bene's will be eating dog food one day because of this. Mixed with refried beans, maybe its not so bad.

Mon, 07/16/2012 - 19:06 | 2622154 Ropingdown
Ropingdown's picture

I'm from the East Coast and I could be wrong, but I believe the taxpayers of California have to make good Calpers shortfalls eventually.  It will be competing for TP funds with railroads to nowhere and medicaid for every fourth CA household.  Good luck.  No moving back east, dudes, until we do our own Prop 13.  After that, you're welcome to come back.

Mon, 07/16/2012 - 16:01 | 2621425 Dr. Engali
Dr. Engali's picture

All your pension plans belong to us.

Mon, 07/16/2012 - 16:02 | 2621435 catch edge ghost
catch edge ghost's picture

Pimpin' ain't easy.

Mon, 07/16/2012 - 16:04 | 2621447 knowshitsurelock
knowshitsurelock's picture

Calper's has nothing to worry about. It's all invested in Credit Default Swaps and Mortgage Backed Securities in the Derivatives Market, which is only leveraged 400 to 1.

What could possibly go wrong?

Mon, 07/16/2012 - 16:31 | 2621609 sdmjake
sdmjake's picture

I could only find about $11,000,000,000.00 worth of MBS in their financial report. What's the problem????

Mon, 07/16/2012 - 16:04 | 2621448 Neezer
Neezer's picture

The defined benefit pension system is a joke. It really only generates massive fees for private equity/hedge fund managers who can promise double-digit returns with a straight face. Since the investments will be illiquid, it will be 10+ years before the pension fund realizes they haven't earned anything close to zero on a nominal basis and actually produced a massive negative return after fees. At least the managers can smooth over the pension trustees in the short-term with bottles of Bollinger and steak dinners every few months to keep the illusion of the "alpha" generation alive, and over the long-term with promises of lucrative consulting jobs for the trustees once their terms are over (or they've been fired for mismanagement).

The day public pension funds report both their investments and their liabilities at fair value is the day the markets crap their pants.

Mon, 07/16/2012 - 16:04 | 2621449 SmittyinLA
SmittyinLA's picture

The Speaker of the CA assembly is LA Mayor Villar's gay Communist cousin, he was elected from So LA where the Mexican mafia counts the votes (literally)  http://www.laobserved.com/archive/2012/07/cudahy_officials_agree_to.php

"In his plea agreement, Perales, 43, who ran the Code Enforcement Division of the Cudahy Community Services Department, admits being a bag man for city officials who took bribes, including Silva and Conde. The Perales plea agreement also discusses election fraud during the 2007 municipal election when absentee ballot were diverted before reaching the City Clerk. Perales “and other city officials routinely and systematically opened the absentee ballots cast in the 2007 City Council election by mail,” according to the statement of facts in Perales’ plea agreement. “Ballots cast in favor of the incumbent candidates were resealed and returned to the mail to be counted. Ballots for non-incumbent candidates were discarded.” Perales and other city officials did the same thing during the 2009 Cudahy City Council election, according to the court document."

 

I've said it once I've said it 1000 times, the Mexican mafia runs CA. 

Mon, 07/16/2012 - 17:42 | 2621876 GeezerGeek
GeezerGeek's picture

Bringing Mexican food to the U.S. was fine. Bringing Mexican workers to the U.S. under the bracero program was fine. Bringing Mexican corruption to California...well, not so fine.

Mon, 07/16/2012 - 17:59 | 2621950 Chuck Walla
Chuck Walla's picture

No wonder Obama wants these guys here. What an electoral advantage!

Mon, 07/16/2012 - 16:13 | 2621502 The Gooch
The Gooch's picture

Scalpers

Mon, 07/16/2012 - 16:23 | 2621572 Widowmaker
Widowmaker's picture

This is the tip of the iceberg.

The scalping of the boomer-generation at large to reward greed and failure awaits in this here wood.

The 1% gets all the stimulus, the 99% gets the fucking rake.

Mon, 07/16/2012 - 16:26 | 2621589 surf0766
surf0766's picture

Clawback all teacher pensions.

Mon, 07/16/2012 - 16:48 | 2621674 L_Conquistador
L_Conquistador's picture

Well, at least CalPERS probably has some really sensible PC investing guidelines, such as not investing in anything which produces emissions, waste, noice, bad vibes, bad karma or bad feelings.  

Mon, 07/16/2012 - 18:10 | 2621985 sumo
sumo's picture

What a relief that well-paid advisors have kept CalPERS away from physical Gold, Silver and Platinum. Because the 10Y, 5Y and 1Y returns on those investments really suck, right?

Mon, 07/16/2012 - 16:57 | 2621710 Winston Churchill
Winston Churchill's picture

My crystal ball sees conversion to 401k's coming very soon.

The death blow for defined benefit schemes has fallen.

More locked in Muppets to fleece.

Bullish for bank stocks.

Mon, 07/16/2012 - 17:46 | 2621894 GeezerGeek
GeezerGeek's picture

If Obama gets reelected and this pension stuff becomes a crisis, look for nationalization of all retirement plans. Roll, pensions, 401Ks, etc. into a "new and improved" Social Security. Waivers will be granted for union bosses and politicians.

Mon, 07/16/2012 - 18:44 | 2622088 graneros
graneros's picture

You nailed that one Brother.  I was going to post "watch for The Fed to bail out Calpers," but you said it much better.

Mon, 07/16/2012 - 16:57 | 2621711 orangegeek
orangegeek's picture

As deflation picks up momentum.

Mon, 07/16/2012 - 17:05 | 2621748 quasimodo
quasimodo's picture

1%? WOOT WOOT

That's better than nothing?

LMAO at Cali everytime I read an article, for it's always about how XXX it broke or XXX is Chapter 11, etc.

This is better than As The World Turns--not that I wish anything ill on the few that live there who actually give a flying fuck.

Mon, 07/16/2012 - 17:49 | 2621905 GeezerGeek
GeezerGeek's picture

Anyone who still lives in Cali and actually gives a flying whatever gets what they deserve.The writing is on the wall: major failure is imminent.

In a couple of years that'll probably apply to U.S. residents, like me.

Mon, 07/16/2012 - 18:58 | 2622121 graneros
graneros's picture

I have several relatives who made it out.  Just had a Brother and Sister in law escape to S. Oregon.  Not sure what that accomplished. But he's on Calpers and a big supporter of Odumbo so no one gives a shit about them anyway.  I do feel for those who want out but can't sell.  Plus so many elderly who lived their whole lives in a completely different California who now find themselves living in a third world toilet bowl and are too old too escape.

Mon, 07/16/2012 - 17:11 | 2621768 Quantum Nucleonics
Quantum Nucleonics's picture

At a 1% discount rate, Calpers unfunded liability will have 12 zeros.  Ouch.  Bankruptcy attorneys in California should have no trouble covering their billable hours quotas this year - any city in California that wasn't insolvent already certainly is now.

Mon, 07/16/2012 - 17:51 | 2621918 GeezerGeek
GeezerGeek's picture

And just what will those bankruptcy lawerys expect to be paid in? Cali IOUs, redeemable for free rides on the high-speed rail system?

Mon, 07/16/2012 - 17:21 | 2621802 ejmoosa
ejmoosa's picture

In 72 years, they could double the value of their assets...

 

Hot damn!

Mon, 07/16/2012 - 17:26 | 2621814 insanelysane
insanelysane's picture

I suggest they buy Greek and Spanish debt, there is 0% chance of subordination or default.  Doesn't every zoo in Cali have a couple of unicorns?

Mon, 07/16/2012 - 17:38 | 2621858 Snakeeyes
Snakeeyes's picture

they could have bought 1 year Treasuries and fired all their money managers.

Mon, 07/16/2012 - 17:38 | 2621860 I should be working
I should be working's picture

Wait, is fiscal 2012 June 2011 to June 2012?

-7% on equity? Who the fuck is running this shit show? You underperformed the S&P 500 by 10% in one year?

Mon, 07/16/2012 - 17:39 | 2621862 g3h
g3h's picture

But wait.  It is not about ZIRP.

The return on fixed income investment is 12%.  Really, despite the low yield, price appreciation is the drive.  So if Calpers invested all in fixed income, it could have beaten the its own goal of 7.5%.

Time to hire Marrisa Mayer for the top job.

Mon, 07/16/2012 - 17:44 | 2621886 I should be working
I should be working's picture

Yeah, clearly if history is any guide you should put EVERYTHING in the investment that is doing the best, preferably on margin.

As we speak someone in California is figuring out how to do just that...

Mon, 07/16/2012 - 17:48 | 2621889 q99x2
q99x2's picture

Abolish the FED and arrest Bernanke, Geithner, Greenspan, Summers and Rubin. Just to mention a few.

Oh and make Krugman wet his pants by putting a warrent out on him for questioning.

Mon, 07/16/2012 - 17:52 | 2621926 dcb
dcb's picture

Maybe they should spend a bit of money to get people inthere to have folks who know what they are doing. my guess is they still work with stupid models instead of long term cyclic pe. I'd also imagine the folks running are picked for political reasons. they also have enough money floating around they could move the market if were active traders.

nice to see I can get a better return on my money in a week then they do a year. (Lol). better off giving their money to grantham and just letting go!!!

Mon, 07/16/2012 - 19:35 | 2622218 A Nanny Moose
A Nanny Moose's picture

I talk to state, county, and city employees about the state of CalPERS and CALSTRS and most of them look at me like I am building an Ark and gathering two of every species. Ooops...forgot to grab a couple unicorns.

Mon, 07/16/2012 - 19:36 | 2622221 economicminor
economicminor's picture

Just a slow moving train wreck, nothing more... go on people, clear the sceen so the professionals can get back to work! The fun is all over...

 

For today!

Mon, 07/16/2012 - 19:36 | 2622222 economicminor
economicminor's picture

Just a slow moving train wreck, nothing more... go on people, clear the sceen so the professionals can get back to work! The fun is all over...

 

For today!

Mon, 07/16/2012 - 20:56 | 2622470 Jena
Jena's picture

TPTB will use schools and children as human shields (not my idea -- I think it was Dan Walters of the Sacto Bee) as they insist on increasing taxpayer funding for the schools in the upcoming election but you know that every cent will go toward funding these bankrupt pensions schemes.  

I wouldn't be surprised if even the high-speed rail boondoggle was a bait-and-switch deal, just a slick trick to get money into the state coffers to keep the pension funds from hitting 'tilt'.

 

Tue, 07/17/2012 - 02:56 | 2623332 cpzimmon
cpzimmon's picture

Why not just raise taxes in California? They do it all the time...nothing new.

Tue, 07/17/2012 - 05:28 | 2623407 HungrySeagull
HungrySeagull's picture

Break the Buck?

Tue, 07/17/2012 - 22:56 | 2626796 Wags
Wags's picture

Demand for Contributions are sure to rise. However the ability to pay is going down. The major problem for most cities in California is their CALPERS Contributions are already destroying their budgets. They are having to laid off current employees to pay for retired emplyees. How sane is that?

What this really means is more bankruptcies are sure to follow.

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