CalPERS reported to be planning to cut its assumed investment return to seven and half

Pension funds, such as UC's, use an assumed rate of return to estimate future earnings and calculate their unfunded liability. In the past, UC has had the most conservative rate of 7.5% as compared with CalPERS and CalSTRS.

It was useful for UC to be able to note that it was more conservative than the others. Now it is reported that CalPERS will cut its assumed rate to the same level as UC, i.e., CalPERS will assume that for each dollar in the fund, it can earn seven and a half cents.

Although there is no direct effect on UC of whatever adjustment CalPERS makes, we do lose the most conservative label.

For details, see http://www.sacbee.com/2011/03/10/3463392/calpers-expected-to-cut-forecast.html

Of course, seven and a half cents used to mean more than it does now:


UPDATE: State Treasurer Lockyer criticized the Little Hoover Commission report on CalPERS. See http://www.scribd.com/doc/50566430/LHC-Pension-Report-Comments-03-11-11