• CalSTRS portfolio loses 25 percent • CalPERS drops 23.4 percent
The Great Recession has hammered the values of the portfolios of the nation’s two largest public pension funds – the California Public Employees Retirement System (CalPERS), and the California State Teachers Retirement System (CalSTRS).
CalSTRS says it has a preliminary loss in value of 25 percent or $43.4 billion in its investment portfolio, putting the market value of its assets at $118.8 billion, as of June 30.
CalPERS says its portfolio lost $56.2 billion in value or 23.4 percent.
“These extreme economic conditions challenge even the most sophisticated investor. We have taken proactive steps at the height of the crisis,” says CalSTRS Chief Investment Officer Christopher Ailman.
CalSTRS says it has a long-term benefits funding shortfall of $22.5 billion as of June 30, 2008. While investment earnings are the single largest source of funds to pay benefits, the historic market declines show investments alone cannot close the funding gap., it says.
Closing the gap will require legislative action in the future to increase contributions made by the school districts and the state.
CalPERS is the nation’s largest public pension fund; CalSTRS is the second largest.
