The State Worker

Chronicling civil-service life for California state workers

November 20, 2008
Forbes article speculates that CalPERS could be the 'next shoe'

Forbes.com has a lengthy piece that tries to devine whether another catastrophe will deliver a final blow to the economy before recovery starts. CalPERS is mentioned in the piece.

John Osbon, one of the experts on Forbes' "Investor Team," says, "I can imagine CalPERS or TIAA-CREF making some announcement that they are cutting benefits and payouts by 30% due to investment losses, non-functioning markets and so on. That would be a real hit with real money."

This strikes us as a bit ignorant, since CalPERS pension benefits are guaranteed. The fund can't simply "announce" a cut in benefits and payouts.

Still, the piece is worth your time if you're interested in what's happening in the national and global economies and what might be coming. Click here to read, "The next economic shoe to drop."

UPADATE: After we posted this item, CalPERS and the state Legislative Analyst weighed in with their takes on the Forbes piece. You can read those responses by clicking here.

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About The State Worker

Jon Ortiz The Author

Jon Ortiz launched The State Worker blog and a companion column in 2008 to cover state government from the perspective of California government employees. Every day he filters the news through a single question: "What does this mean for state workers?" Join Ortiz for updates and debate on state pay, benefits, pensions, contracts and jobs. Contact him at (916) 321-1043 and at jortiz@sacbee.com.

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