CalPERS said it earned 18.4 percent, marking the fourth time in five years it has earned double-digit investment returns.
CalSTRS clocked in at just under 18.7 percent. "These numbers are extraordinary and very encouraging," said
Both pension funds are still trying to recover from the crippling multibillion-dollar losses of 2008-09, when the financial markets crashed. Despite the healthy returns in the latest 12-month period, both funds remain "underfunded," which means they don't have assets to cover all of their long-term pension obligations.
"There's much, much work to be done," said
For the two funds, the 18 percent-plus gains were substantially higher than their official forecasts of 7.5 percent.
Despite the strong results, both pension funds are continuing to raise pension contribution rates. CalPERS in April approved the first in a series of rate increases to reflect longer life expectancies for retirees.
As for CalSTRS,
Both funds saw huge gains in stocks; CalSTRS public stocks rose by 24 percent and its private equity returns came to 26 percent. CalPERS' public stocks increased 24.8 percent and its private equity 20 percent.
Over the years, the two funds have made major strides in recovering from the market crash. CalPERS' portfolio sits at
But because they spent several post-crash years with a much smaller pool of money to invest, they've been unable to keep pace with rising liabilities. For instance, CalPERS is just 76 percent funded.
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