Jamesian Philosophy Refreshed

One issue underlying the bill I discussed yesterday is CalPERS long-term solvency. CalPERS has estimated that it has as assets now under management only about 71% of what it will need to make the pension payments due to workers of the state and local governments.   That isn't a disastrous shortfall. After all, the payments aren't all due tomorrow. No 72% of them are due tomorrow. And it has investments out that are earning money as we speak. What you don't want to happen, of course, is for retirees to get paid by the revenue from today's workers. The retirees should be paid from the invested value of what they paid into the system, and today's workers should be building up their own future returns. The 71% number is low enough to make managers properly uncomfortable. So it is natural that they look for other avenues to raise money. Even direct non-bank lending. But here we get to the reason there IS a public records act requiring transparency. It is there out of a s...

    California Assembly Bill 386, which one might charitably describe as a bill to encourage more innovative investment by the great California public pension manager, CalPERS, died in committee in the state Senate recently. I don't mourn its passing, for a reason to which I'll come in tomorrow’s posting. Today, I’ll try to explain what the bill in question was. The California Public Records Act requires state agencies and localities to make their records available for public inspection,unless a specific exemption from disclosure applies. There is as the law stands an exemption for certain records regarding alternatives investments in which public investment funds invest. This  protects the arrangements that CalPERS makes with investment funds, "vehicles," including those which employ a private debt strategy. So in effect CalPERS can get into the private debt market only once it partners with a private investment fund already in that business. Then its records, for th...