Despite CalPERS, like most government pension plans, being vastly underfunded, they're actually still paying out more money to beneficiaries than they're taking in as contributions from municipal employees and employers.
CalPERS 2016-17 financial report:
Look at the numbers circled in green. That's what they're putting into investments. The numbers circled in red are what they're taking out each year.
The green numbers were even lower in recent years. CalPERS has been putting far less into the market than it's been taking out every year. They're belatedly starting to increase contributions, and the net contributions (green minus red) should turn positive fairly soon.
To the extent CalPERS is representative of public pensions overall (and it generally is), turning from net seller to net buyer will be a tailwind for stocks. And should stocks decline over a few years, it makes pensions even more underfunded and thus requires them to buy even more. Call it the CalPERS Put.
Subscribe to: Post Comments (Atom)
Body Count goes to Vegas! Ernest Scherer III was a Vegas loser who fancied himself a professional poker player. Doesn't that photo tell ...
UPDATE: Edited to remove the guy's name. I hope nobody harasses him or his employer. He was good-natured and his sign was innocuous a...
Maybe teaching racial division and hatred wasn't such a good idea after all
Doctor cycling in California run down, stabbed by driver screaming about ‘white privilege’ : A doctor cycling along the Pacific Coast Highwa...
Post a Comment