CalPERS

How a governor’s bid to exert control over California public pensions backfired

How a governor’s bid to exert control over California public pensions backfired

Facing an unprecedented budget deficit shortly after taking office in 1991, Republican Gov. Pete Wilson made an unusual request of the state’s largest pension fund: Can you be more liberal in your predictions about the stock market?

 

If the California Public Employees’ Retirement System raised its official projection of investment growth, Wilson said, the state’s required contribution to the pension fund would go down by more than $300 million.

CalPERS rejected the idea, but Wilson still needed a way to balance the books. So he proposed a sweeping reorganization of...

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