Wednesday
July
30
2014
10:11 am
Weather

  Home
  Local News
  State / National / World
  Sports
  Opinion / Letters
  Business
  Arts / Entertainment
  Lifestyle
  Obituaries
  Calendar
  Submit Event
  Comics / Games
  Classifieds
  DJ Designers
  Archives
  Advertise With Us
  About Us
 
 
 
 

Check out our archive of Dining Guides - Yum!

OP-ED: CalPERS remains in a deep hole despite big return
July 17, 2014, 05:00 AM The Fresno Bee

California’s $300 billion public employee pension fund reported the upbeat news that its rate of return exceeded 18 percent in the fiscal year that ended last month.

But happy days are hardly here again for the California Public Employees’ Retirement System, or for taxpayers who must make good on government pensions.

“There’s much, much work to be done,” said Ted Eliopoulos, CalPERS’ interim chief investment officer. “We’re ever vigilant; we try not to get too excited in good years or bad years about one-year results.”

Eliopoulos knows better than most that CalPERS remains in a deep hole.

Even with the 18.4 percent return, CalPERS estimates that it is only 76 percent funded, a remnant of overpromises made by the Legislature in 1999 and the financial crash of 2007 and 2008. CalPERS would need to make 18 percent on top of 18 percent for several years running, and no one should expect that to occur.

CalPERS was also in the news last week when its former chief executive, Fred Buenrostro, pleaded guilty in a sordid federal criminal case in which he admitted to taking bribes of $200,000 in cash, some of it delivered in a shoebox, no less, as detailed by The Sacramento Bee’s Dale Kasler.

The criminal case against Buenrostro and the person who allegedly bribed him, placement agent Alfred Villalobos, shouldn’t obscure that the vast majority of CalPERS workers are honorable and dedicated to doing right by people who rely on the government pensions.

Ever since the Buenrostra-Villalobos matter became public, CalPERS has taken steps to restore confidence in its operation.

It retained the law firm of Steptoe & Johnson to conduct an internal investigation and implemented the firm’s recommendations, which are intended to improve internal controls.

CalPERS made a point of publicly cooperating with other investigating agencies and has increased disclosure of what had been hard-to-get information such as employee travel costs.

In 2009, long before the guilty plea, Kasler wrote about how the pension fund released piles of paperwork showing exorbitant fees Villalobos took in exchange for getting CalPERS business for various investment houses, and that Buenrostro knew about the payments.

The fund since has instituted a disclosure policy affecting placement agents, and sacked a firm that had managed $1 billion in CalPERS’ money, but was tainted by its association with Villalobos.

The case against Buenrostro and Villalobos is salacious, but it’s also a sideshow. No matter how corrupt they might have been, they would not have affected the giant pension fund in any significant way.

The far bigger problem is CalPERS’ unfunded liability. That will take years to fix.

In February, CalPERS estimated that pension costs could rise by as much as 5 percent of payroll for most employees and 9 percent of payroll for police and firefighters during the next five years.

Pensions promised to government workers will have to be paid. That’s where taxpayers come in. We ultimately will be responsible for keeping those promises.

 

 

Tags: calpers, percent, years, villalobos, buenrostro, pension,


Other stories from today:

Letter: Water wars
Comic effect
OP-ED: CalPERS remains in a deep hole despite big return
 

 
Print this Page Print this Page  |  Bookmark and Share
<< Back
 
Return To Archives
 
  


 
 
 
Daily Journal Quick Poll
 
Do you think Social Security will be solvent when you retire?

Yes, I'm already retired
Yes, I'm not there yet but it will be
No, the baby boomers will exhaust it
Not without major changes
It better be
Too heady to think about

 

 
 
 
 
 
 
US economy grew at strong 4 percent rate in spring
WASHINGTON — After a dismal winter, the U.S. economy sprang back to life in the April-June quarter..
Shelling of UN school kills 15 as Gaza war rages
JEBALIYA REFUGEE CAMP, Gaza Strip — Israeli tank shells slammed into a crowded U.N. school shelter..
Senate heads toward vote on border bill
WASHINGTON — A bill to deal with the immigration surge at the border was headed for a procedural v..
More >>  
 
 
  
 
  
 
©2014 San Mateo Daily Journal
San Mateo County obituaries