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CalPERS is underfunded and unrealistic. Can it save itself?

CalPERS is underfunded and unrealistic. Can it save itself?

If you think the stock market's steep slide this month hammered your personal portfolio or 401(k), imagine what it's done to California's state pension system, CalPERS. Years of overoptimistic stock purchases and inadequate contributions have left it terribly vulnerable, and just a few years of down markets could leave it insolvent.

Financial statements released last month (for the fiscal year ending June 30, 2015) showed that the pension system was only 77% funded — and that percentage has certainly dropped alongside all the stock indices in recent weeks. If taxpayers are going to avoid having to bail out CalPERS, the system needs an overhaul.

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