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The U.S. Supreme Court has dismissed a lawsuit by California’s public employee retirement system against investment banks that supposedly “duped” them into buying some $700 million of stock. CalPERS, the nation’s largest pension trust fund, could have joined a class-action with others but declined to do so. Then CalPERS missed the three-year statute of limitations to file its own suit and the Supreme Court voted 5-4 to toss the case. News reports said the loss would cost “California government retirees” tens of millions. In reality, government retirees will continue to receive their generous pensions while taxpayers ultimately pick up the tab for the losses of $300 million. CalPERS unfunded liabilities have increased 383 percent in ten years and last year CalPERS was some $100 billion short of fully funding its pension obligations.
CalPERS is obviously mismanaged and also corrupt. As we noted, Fred Buenrostro bagged a salary of $238,992 as chief executive of CalPERS from 2002 to 2008. He also took more than $250,000 in bribes from Alfred Villalobos, a former CalPERS board member, to steer the pension fund’s investments to the clients he represented. Last year Buenrostro was sentenced to four and a half years in prison, but he will still draw his CalPERS pension of nearly $12,000 a month, a full $141,228 a year before taxes. The recent loss of $300 million won’t hurt him because taxpayers will be picking up the tab for that, along with the massive unfunded liabilities. Taxpayers can be forgiven for believing that CalPERS corruption and mismanagement will continue unabated.