I, Vadim Segal, read a good news story through that I came to know that nation's largest Public Pension Fund has earned profit of .1% on its investment. This ROI is short from projections, so local government will have to contribute to more money to the fund.
An official related to the Public Pension Fund said- Return on investment is quite low than expected return, therefore state and local governments will have to give more money to the fund.
The return reported by the California Public Employees' Retirement System is quite below its projected return of 7.5 percent for the fiscal year ended on June 30. And it has compelled the administrators to reconsider current investment strategies.
The return reported was lower than the state's pension fund for teachers.
Chief Investment Officer Joe Dear said- The last 12 months were a challenging period for all investors.
Dave Hitchcock, director of state and local government ratings at Standard & Poor's in New York, stated- the fund's low return was symptomatic of the entire financial industry.
Hitchcock said- We're in an age of lower global returns than what we saw 10 years ago.
Local government officials seemed quite disappointed with the return and they said it is the time when pension investment policy should be reformed.
Deputy Executive Director of the League of California Cities Dwight Stenbakken said- the current pension policy depends too heavily upon earnings. When bonds, real estate, stocks, and other pension investments don't meet the expected target, the difference has to be compensated with the help of taxpayers.
I, Vadim Segal, really feel that government should really look into the issue and should reform the pension policy so that return on investment can be improved and pension policy may not become burden on the state.