Politics driving CA pension investments

Oct. 5, 2012

By Joseph Perkins

The California State Teachers’ Retirement System announced this week that it is sinking $42.8 million into four infrastructure projects, including a solar power plant near Sacramento. That follows CalSTRS’ previous “investment” in another solar-power plant near the state capital, which will be operated by SunEdison of Belmont.

Said Harry Keiley, chairman of the pension fund’s investment committee in a prepared statement, “These investments reflect CalSTRS’ commitment to the California economy and our willingness to contribute to it in a way that helps our state and offers the fund long-term, steady cash flows.”

Well, I disagree. I think those CalSTRS investments in solar power were driven not by desire to earn the greatest return for the system’s retiree, but to advance the political cause of renewable energy.

Indeed, the pension dollars CalSTRS is risking on the solar-power plants near Sactown almost certainly would earn more over the over the short, medium and long term if it simply was invested in Chevron, the “supermajor” oil company based in San Ramon, Calif.

But Keiley and his committee don’t care about what it is in the best financial interests of the CalSTRS’ beneficiaries. They have subordinated their fiduciary responsibility to political advocacy.

Indeed, if CalSTRS investment decisions were based strictly on dollars and cents, there’s no way it would invest in solar power at this stage in the industry’s development.

While solar shows promise, it’s far from certain that it will emerge as a major provider of electricity. And it remains doubtful that solar power plants — like the ones on which CalSTRS is gambling the pensions of retired teachers — will ever turn a profit, sans government subsidy.

Indeed, among the 17 companies in the Bloomberg Global Large Solar Index, only one posted a profit during the second quarter of this year. The industry as a whole continues to hemorrhage red ink despite the billions of dollars they have received in taxpayer subsidies.

Keiley somehow thinks that the solar power plants into which CalSTRS has poured money will be different. He grossly understates the riskiness of the pension funds “investments” in solar power.

We’ve seen before such ill-considered investment decisions by California public pension funds. Most notably, the whopping $1 billion the California Public Employee Retirement System  lost on the failed Land Source development near Los Angeles.

CalSTRS won’t come remotely close to losing a billion bucks on its latest investments in solar power. But $42 million here, $42 million there and pretty soon Harry Keiley is talking real money.

36 comments

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  1. The Africanized Swarm of Ted Steele System
    The Africanized Swarm of Ted Steele System 5 October, 2012, 11:43

    Calpers value today— 244.7 billion.

    Reply this comment
  2. surfpunk
    surfpunk 5 October, 2012, 11:58

    If i was to depend, on a goverment class pension,i would be conserned about all the games PERS has been playing.Sticking your head in the sand and repeating its my right,it was promised over and over wont give you a 7.25% return.

    Reply this comment
  3. Tax Target
    Tax Target 5 October, 2012, 12:11

    Yes but what is Calpers’ future payout liability?

    Reply this comment
  4. The Africanized Swarm of Ted Steele System
    The Africanized Swarm of Ted Steele System 5 October, 2012, 12:33

    PERS has a long dependable history. You sir, do not.

    sorry man.

    Reply this comment
  5. queeg
    queeg 5 October, 2012, 14:18

    Pension article are inserted for gloomers to foam at at the mouth, scream, scratch chalk boards, walk on glass….

    Can’t you see your media masters are making you unhappy, a gloomer, a doomer….your becoming one sick puppies.

    Reply this comment
  6. queeg
    queeg 5 October, 2012, 14:20

    Your media manipulated….your unhappy, glooming,,dooming,,,,,kicking your pet rock…..can’t you get it….there is a whole big wonderful world out there…..enjoy it….

    Reply this comment
  7. Rex the Wonder Dog!
    Rex the Wonder Dog! 5 October, 2012, 14:29

    Calpers value today— 244.7 billion

    CalTURDS unfunded liability today— $500+ billion

    Teddy hates the truth 😉

    Reply this comment
  8. The Africanized Swarm of Ted Steele System
    The Africanized Swarm of Ted Steele System 5 October, 2012, 14:32

    the poodle is foaming with envy– sad…. and poodle? Still no comment on the pensions lawsuit predictions you lost? hmmmm nice…..

    Reply this comment
  9. SeeSaw
    SeeSaw 5 October, 2012, 15:15

    CalPERS unfunded liability today is $90 billion, Rex. I have seen that figure cited on the CalPERS website, in the “CalPERS Responds” section. If you believe that CalPERS has an unfunded liability of $500+ billion, site a reputable source’s published document, that says such. You can’t just make things up.

    Reply this comment
  10. surfpunk
    surfpunk 5 October, 2012, 16:18

    seesaw, pers unfunded liability TODAY around 90 bill. FUTURE liability 500bill. You and rex are both right,you still in denial?I have aaa ,i still put gas in my truck.

    Reply this comment
  11. Rex the Wonder Dog!
    Rex the Wonder Dog! 5 October, 2012, 17:19

    Yes seesaw, “CalTURDS Responds” is a source of truth (rolls eyes wildly )…..sort of like the truth about sb400 NBOT cost anything 😉

    Reply this comment
  12. Ulysses Uhaul
    Ulysses Uhaul 5 October, 2012, 17:31

    Nice talk potty mouth

    Reply this comment
  13. SeeSaw
    SeeSaw 5 October, 2012, 18:43

    Rex, if you are saying that CalPERS is not a credible source for information, while you are, you truely have popped a gasket. The usual verbage about SB400 is old and over. Wail about it at the moon every night if you want–it will not change anything.

    sufpunk: An unfunded liability is the same thing as a future liability. We have had a pension reform law passed, so those doom–sayers are going to have to downgrade their numbers. I have an AA too–I put gas in my vehicles, and I know how to add and subtract.

    Reply this comment
  14. Rex the Wonder Dog!
    Rex the Wonder Dog! 5 October, 2012, 19:13

    Rex, if you are saying that CalPERS is not a credible source for information, while you are, you truely have popped a gasket.

    Errr..YES, that is exactly what i am saying seesaw, and Exhibit #1 is SB400, aka 3%@50, that was NOT supposed to cost anything but has ended up costsing several hundreds of billions of doillars.

    Nuff said 😉

    Reply this comment
  15. The Africanized Swarm of Ted Steele System
    The Africanized Swarm of Ted Steele System 5 October, 2012, 20:42

    We know this about the Poodle-

    1. He knows little about Calpers…and

    2. He does not want to talk about his failed lawsuit predictions!

    0 for 13 ™ lol—- just too easy.

    Reply this comment
  16. Rex the Wonder Dog!
    Rex the Wonder Dog! 5 October, 2012, 21:39

    1. He knows little about Calpers…and
    ==
    $500 BILION in unfunded liabilities 😉

    2. He does not want to talk about his failed lawsuit predictions!
    ==
    Prop 30 = DOA, $100 backing that up, Teddy runs from that action b/c he KNOWS Prop 30 is going to be detsroyed 🙂

    0 for 13 ™ lol—- just too easy.
    ==
    118-0, I can never be beat, perfecto 😉

    Reply this comment
  17. Bob Smith
    Bob Smith 6 October, 2012, 00:50

    Not only do the trustees of CalStrs get the thrill of spending other people’s money on advancing their own personal political agendas, they also get the thrill of garnishing other people’s money aka taxpayers to make up the investment shortalls. They can’t lose!

    Reply this comment
  18. The Africanized Swarm of Ted Steele System
    The Africanized Swarm of Ted Steele System 6 October, 2012, 08:15

    LOL Post 18 above from the Poodlegirl is People’s Exhibit 1 in his conviction for posting while dull. You make this easy little fella!

    0 for 13 ™ and still can’t talk about his infamous lawsuit prediction fails !!! LOL #ZEROPOODLE

    Reply this comment
  19. Rex the Wonder Dog!
    Rex the Wonder Dog! 6 October, 2012, 09:16

    Teddy, why don’t you take yourself and the sock puppets to the beach today, give your wimpy fingers a rest from the keyboard whoppers for the day 🙂

    Reply this comment
  20. Ulysses Uhaul
    Ulysses Uhaul 6 October, 2012, 11:25

    Poodle enjoy your truck stop shift working with Big Betty, Miss Boron 1957.

    Are Jalapeno Corn Dogs on special today?

    Reply this comment
  21. The Africanized Swarm of Ted Steele System
    The Africanized Swarm of Ted Steele System 6 October, 2012, 17:56

    Miss Boron !! LMAO !!

    Hey Poodle– seems like a thought has crossed your mind? Must have been a long and lonely journey.

    0 for 13 ™ and day 58 Poodle still can’t talk about his law suit prediction losses!

    Reply this comment
  22. Tough Love
    Tough Love 6 October, 2012, 20:25

    Quoting …”Indeed, the pension dollars CalSTRS is risking on the solar-power plants near Sactown almost certainly would earn more over the over the short, medium and long term if it simply was invested in Chevron, the “supermajor” oil company based in San Ramon, Calif. But Keiley and his committee don’t care about what it is in the best financial interests of the CalSTRS’ beneficiaries. They have subordinated their fiduciary responsibility to political advocacy.”

    CalPERS can do this BECAUSE they still believe the Taxpayers are on the hook for all asset shortfalls necessary to pay the grossly excessive level of promised benefits.

    Surprise surprise … in the endgame, Taxpayers will not pay up and stupidity like this will only result in increased levels of unpaid “promises”.

    Reply this comment
  23. Tough Love
    Tough Love 6 October, 2012, 20:44

    SeeSaw, You asked for a source for REX’s claim that CalPERS unfunded liability is %500 Billion vs the $90 Billion that CalPERS claims.

    This source … http://public2.tableausoftware.com/views/PensionFundingRatios222/PublicPensionFundingRatios?:embed=y&:loadOrderID=0&:display_count=yes

    shows the following unfunded liabilities for various CA Plans:

    Contra Costa County=$6B, CA Teachers=$165B, CA PERF=$234B, San Diego County=$8B, LA County ERS=$33B, San Francisco City & County=$11B

    While I do not believe they are all part of CalPERS, the total just for these Plans is $457 Billion.

    Reply this comment
  24. SeeSaw
    SeeSaw 6 October, 2012, 23:05

    None of those you list are CalPERS pension plans, TL, although I don’t know what CA PERF is–with an unfunded liability of $243 Billion, it could not be a member of CalPERS. Rex insists on going around saying that CalPERS’s unfunded liability is $500 billion–there are 87 different DB pension plans in the CA public sector–CalPERS is only one plan, and it says its unfunded liability is $90 Billion–not $200+ Billion reported in the Wall Street Journal. I only repeat what I have read, and if it is from what I consider a credible source. Rex is certainly no credible source for anything.

    Reply this comment
  25. Rex the Wonder Dog!
    Rex the Wonder Dog! 6 October, 2012, 23:27

    CalSTRS unfunded liability s $500 BILLION, and I am not the one saying that-I just repeat it- STANFORD UNIVERSITY did, they have the research, an INDEPENDANT top ranked Ivy style university, a far cry from your pathetic CalTURDS Responds garbage.

    Reply this comment
  26. Tough Love
    Tough Love 7 October, 2012, 00:00

    SeeSaw, You really ought to think about reliable a source of unbiased information CalPERS really is.

    Reply this comment
  27. The Africanized Swarm of Ted Steele System
    The Africanized Swarm of Ted Steele System 7 October, 2012, 06:55

    LOL The Stanford student term paper report!!!!!!!!!! OMG that’s funny! That joke has been so widely debunked!!!!! Is that all you got Poodle?

    And still no comment about your massive lawsuit prediction failures? I think there were three??? LOL BFF OMG ! TTYL !!!!!

    Reply this comment
  28. Rex the Wonder Dog!
    Rex the Wonder Dog! 7 October, 2012, 08:38

    Stanford, unbiased tier 1, top university on the west coast, Teddy Steals and CalTURDS, walking talking propaganda fools with no support of facts, just hot air.

    BAM!!!!!

    Reply this comment
  29. Queed
    Queed 7 October, 2012, 10:22

    You are truly useless to us on Cwd….same crap every day!

    Reply this comment
  30. SeeSaw
    SeeSaw 7 October, 2012, 10:40

    CalPERS is my bread and butter. That check that goes into my bank account on the first day of every month is all the information I need.

    Reply this comment
  31. The Africanized Swarm of Ted Steele System
    The Africanized Swarm of Ted Steele System 7 October, 2012, 15:51

    LOL Poor ZERO the Poodle ™

    Reply this comment
  32. Rex the Wonder Dog!
    Rex the Wonder Dog! 7 October, 2012, 16:03

    129-0 BABY!

    Reply this comment
  33. Rex the Wonder Dog!
    Rex the Wonder Dog! 7 October, 2012, 16:06

    Queen says:
    October 7, 2012 at 10:22 am
    You are truly useless to us on Cwd….same crap every day!
    ==
    Teddy- you misspelled your gimmick account, it was “Queeg”, not “Queen” lil buddy (projecting much Teddy??). Be more careful when you switch back and forth between the two, or should I say 200 gimmick accounts!!!

    Of course if you stuck with one handle you would never need to worry about misspelling your sock puppet names………

    Reply this comment
  34. The Africanized Swarm of Ted Steele System
    The Africanized Swarm of Ted Steele System 7 October, 2012, 21:21

    mmmmmmm…..any comment on your now infamous lawsuit prediction failures Judge Wapner?

    lol

    Zero the Poodle! ™

    Reply this comment
  35. Rex the Wonder Dog!
    Rex the Wonder Dog! 7 October, 2012, 22:14

    No Rusty 😉

    Reply this comment
  36. The Africanized Swarm of Ted Steele System
    The Africanized Swarm of Ted Steele System 8 October, 2012, 08:19

    Well, well, at least you acknowledge that you have no comment on your prediction losses….at least you’ve finally acknowledged the losses, that’s a start…………..hmmmmm….Zero the Poodle—– “no comment”——- don’t you think you’d feel better getting it off your chest? I mean you could say “well, I was wrong in those comments I was so positive about, I guess the appeals court and the supreme court know way more about contract law than I do….”

    Or—– you could just say “no comment” I guess.

    Good for you– at least you’ve admitted it!

    Reply this comment

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