By Stephen Frank, California Political News and Views
CalPERS has over one trillion in unfunded liabilities. Instead of a ROI of 7% as they advertised they would, it is UNDER 2%. Then in an effort to kill off private pension systems—and to get more money into government control, the Legislature passed a bill to FORCE private workers into the government system. How is that working? It isn’t.
“Just like Brexit, CalPERS is falling back on cheap sloganeering to cover ideas doesn’t hold up to scrutiny. For instance, CalPERS keeps saying it needs private equity for its returns. Yet there are other approaches that would deliver private-equity like returns for the portfolio, such as public market replication of private equity or applying more leverage to the entire portfolio. More important, if CalPERS’ real objective were returns, it would not be dithereing about with creating a new middleman with less experience than private equity firms but where the “talent” would expect to get economically similar terms to what they’d get if they launched their own fund. The way to achieve the highest returns possible from private equity is to bring most or all of it in house. CalPERS’ refusal even to discuss this alternative says the pension fund has other objectives that it is keeping hidden. It is hard to see how any covert motivations could be aligned with those of beneficiaries; otherwise, there would be no reason to hide them.
And just like Brexit, CalPERS is more than two years into its process and is hardly any further along than when it started. “
Government, by definition is incompetent, mismanaged ad/or corrupt. In the case of CalPERS and the theft of PRIVATE sector workers wages, it is all three. Sadly, the very workers that are going to have government steal from their paychecks—and their financial future, are either silent or vote for the thieves at election time. They only have themselves to blame for their poverty—they voted for it.