Turnaround at Calpers

California's giant public employees pension fund gained 11.4 percent in the year ended June 30, its best performance in three years. A year earlier the fund lost 23.4 percent, which forced taxpayers to shell out additional money for retirees and raised questions about the generosity of the state's retirement plans (L.A. pensions face a similar problem). From Bloomberg:

Calpers valued the plan at $200 billion as of June 30. The growth from $180.9 billion a year earlier marks the first full year of returns under Dear, who was hired in March 2009 to stabilize the fund. Calpers had hemorrhaged $96 billion from its record high of $260 billion, reached in October 2007, falling to $164 billion by January 2009. Dear joined the plan from the Washington State Investment Board. Calpers lost 4.9 percent in fiscal 2008. That followed four straight years of gains that topped 10 percent, including a 19 percent return in 2007.

It's good to see that the investment returns are climbing back up, but the improving numbers could complicate Gov. Arnold Schwarzenegger's campaign for pension reform. That's unfortunate because, solid gains notwithstanding, the state remains on the hook for hundreds of billions of dollars in unfunded obligations. Eventually, taxpayers will have to help pay that bill.