Hold on to those petitions to gut police and fire pensions, Mayor Morris. The California Public Employees Retirement System (CalPERS) just had its best year since Bill Clinton was President.
The California Public Employees’ Retirement System, which provides benefits to about 1.7 million state and local government workers, retirees and their dependents, said its total investments were worth $282.6 billion as of Friday, the highest ever.
Better known as CalPERS, the country’s biggest public pension fund was especially helped by the stock market’s best year since 1997. Among its holdings, publicly traded shares did best; bonds and commodities did the worst.
The results for 2013 capped a wild ride for the agency over the last 11 years. The fund was especially hard hit during the Great Recession of 2007-09. In 2008, amid the depths of the worst global economic slowdown in half a century, the fund lost 27.8% of its value.
Since then, it has climbed back. In 2011, the fund’s increase in value was a mere 1.1%. For 2012, the rate of investment growth was up to 13.3%. By early 2013, the total value of the fund officially surpassed its pre-recession high.
CalPERS’ overall rate of return for 2013 was more than twice the 7.5% minimum that the fund’s board has said it needs to meet current and future obligations to retirees.
This is great news for cities like San Bernardino because higher investment earnings generated by CalPERS equates to lower pension contributions for cities.
But as the LA Times article also states:
“This definitely takes some of the wind out of the sails of critics,” said Steve Maviglio, a spokesman for Californians for Retirement Security, a coalition of 1.6 million government workers and retirees. CalPERS’ new report makes it “hard to make the case that the sky is falling with returns like that.”