CalPERS, the California Public Employee’s Retirement System, has big bucks from California taxpayers to invest in support of the promises that California politicians have made to public employee unions.
Asset International’s Chief Investment Officer reports that CalPERS has only 8.9% of its assets invested in California as of the end of the 2012 fiscal year. In response to critics who say that CalPERS should be investing more in California, CalPERS reports that investments were in line with its fiduciary responsibility to members to provide a good and stable income.
Let that sink in for a minute.
By fiduciary responsibility, CalPERS has a legal and moral obligation to make investments that are in the best interest of the public employees of California, who participate in the fund. Thus, CalPERS has made the judgment that investing in California is a losing option. Take a look at some of their California investments: low income housing (not a big money maker) and multinational companies like Apple, who are growing outside of California.
California is such a bad place to invest that even its public employee pension funds have to be invested elsewhere. However, that condition exists in large measure due to the work of California’s public employees through their regulatory burden on California businesses and the tax burden required by an over-sized state government.
Makes one wonder…are California public employees personally benefiting through their pension fund investments from driving the productive out of the state? Another company moved from California to another state or country? Not a problem as CalPERS has investments in that other place.
California politicians and public employee unions should take a hard look at the anti-productive policies that they favor which makes California such an unfit location for investment that they cannot responsibly invest more CalPERS money in the state.