CalPERS Reports Preliminary 11.2 Percent Investment Return for Fiscal Year 2016-17

SACRAMENTO, CA - The California Public Employees' Retirement System today reported a preliminary 11.2 percent net return on investments for the 12-month period that ended June 30, 2017. CalPERS assets at the end of the fiscal year stood at more than $323 billion.

The strongest returns came from the Public Equity Program, which generated a 19.7 percent return. Private Equity's preliminary net returns were 13.9 percent, followed by Real Estate, with preliminary net returns of 7.6 percent.

Based on these preliminary fiscal year returns, the funded status of the overall CalPERS fund is an estimated 68 percent, an increase of 3 percentage points from the previous fiscal year. This estimate is based on a 7 percent discount rate.

And then there is this article:

http://www.latimes.com/business/la-fi-calpers-private-equity-20151117-story.html

Notice, they had to DEFEND public equities.

Also at the end:

“If you have the right managers, you do very well.”

When I analyzed my farmers records at the end of the year I would ask them if it was luck or management. Bad year = bad luck, good year = good management.

They are lucky Trump was elected........................

I have to admit, that is a devilish idea they had in the 1970’s and early 1980’s, promising pensions and not paying more than a couple dimes of it, shackling future elected budgeters with bills that they'd have to pay for decades and decades.

And even more fascinating, most people are fine with it. I asked someone once if, say, a city council met tomorrow and then broke up city taxes into percentages, and then assigned all of it to various projects and then stated ‘this can never be changed’, would they be okay with it?

The answer was an immediate no.

‘What if it was just half of the budget, would that be okay to pre-determine?’

Of course not.

Well, guess what, on the state level in California, nearly 95% of the entire state budget is shackled to previously determined spending. No, you can't change it. In most counties, 72% of the budgets are predetermined before anyone takes the slightest bit of action. At the city level, well over half is already spent.

And for a lot of school boards, next year will mark the first year that most school districts will be paying more for past employees than they are paying for all current school operations (50.1% of the school budget is either for current or past retirement debt service.)

Oh, and those great returns on public equity? Guess who's paying it - yep, your schools, your city, your county and of course, your state. Governments charging interest on government loans is ludicrous. They aren't for profit companies, they are just another form of taxation without the required need to budget for those taxes.

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