The bad news in the Golden State just keeps piling up. California's two biggest government pension funds lost $99.6 billion — really, an awful lot — in the fiscal year that ended June 30. The funds represent general public employees and teachers. One of the funds fell by 25 percent.
With less money on hand to cover commitments to 1.6 million workers, retirees and their families, state and local government and school districts will have to cover the shortfall. Those commitments were based on returns from investments in stocks and real estate, among other assets, continuing at an average pace of at least 7.75 percent.
Before the economic crisis, the funds had been earning double-digit returns. So much for that.
The news comes just as state lawmakers reach a deal with Gov. Arnold Schwarznegger to close California's $26.3 billion deficit.