CalPERS reports higher earnings

SACRAMENTO — California’s largest public-employee pension fund saw an upturn in profits generated from its investments in the last year, officials reported Thursday, a record that offered some improvement to its longterm fiscal stability.

Leaders of the California Public Employees’ Retirement System, or CalPERS, reported preliminary numbers showing an 8.6% net return on investments for the 12month period that ended in June. That is a higher rate of return than the pension fund expects to earn over the coming decades but not necessarily reflective of a change in its long-term challenges.

“While it’s important to note the portfolio’s performance at the 12-month mark, I can’t emphasize enough that we are long-term investors,” Ted Eliopoulos, CalPERS chief investment officer, said in a statement. “We will pay pensions for decades, so we invest for a performance that will sustain the fund for decades.”

CalPERS expects a 7% return on its investment over the next 30 years, an estimate that was lowered in late 2016 over concern that more optimistic expectations could leave employers — state and local governments — on the hook for billions of dollars in unbudgeted payments. Even so, that change raised the required government contributions. Local government officials across the state said this year they remain worried about having to cut services as a result of the higher costs.

Pension fund officials said the system is now projected to have 71% of the assets it needs to pay existing public employee retirement obligations. That is a slightly higher estimate than one issued last year, but critics still say the pension system will be too reliant on taxpayer dollars.