Pension Funds

Wall Street investors aren't the only ones feeling the sting of Facebook Inc.'s falling stock: So are some of the country's troubled government pension funds. Public employee retirement funds from around the country took part in the Menlo Park, Calif., social networking juggernaut's May 18 initial public offering and plowed millions of dollars into Facebook stock before its value plunged. Facebook shares continued their decline Friday, falling $1.03, or 5.4%, to a record low of $18.06, or less than half their $38 offering price.

Are you ready to bet that the great housing recession is finally over and that values are rising again? If so, some of the nation's largest institutional investors are ready to roll the dice with you. Pension funds, endowment portfolios and the like don't typically invest in residential real estate, which is the world's largest asset class. But given their long-term horizons, housing is considered a natural fit. And now there's a new investment vehicle that aligns their stash of cash with creditworthy home buyers.

SACRAMENTO - California unions, accustomed to getting their way in the Capitol, lost some ground last year when Gov. Jerry Brown pushed through the Legislature a series of public-pension cuts that affect their members. Now several labor groups have gone to court in an attempt to reverse some of the cuts, forcing Brown to defend legislation he used to persuade voters that he was being frugal with their tax money. "We're just fighting for what has been promised us," said Jon Rudolph, president of the Deputy Sheriffs' Assn.

The municipal-debt market has always rested on a simple notion - that local governments would do whatever they must to repay borrowed money. Cities wouldn't want to default on their bonds, some of which are owned by their own citizens. And they wouldn't want to alienate Wall Street, which finances many of their civic projects. The bankruptcies of Stockton and San Bernardino have shaken the decades-old faith in that premise, and turned the California cities into closely watched test cases for how municipalities grapple with deep-rooted financial problems.

The Supreme Court on Monday agreed to hear an appeal filed by Hughes Aircraft Co. in a case involving whether retirees from the Los Angeles-based aerospace firm are entitled to claim part of an estimated $1.2-billion surplus that accumulated in the company pension fund. The decision, expected early next year, could have a profound impact on how companies handle pensions in the future.

Are you ready to bet that the great housing recession is finally over and that values are rising again? If so, some of the nation's largest institutional investors are ready to roll the dice with you. Pension funds, endowment portfolios and the like don't typically invest in residential real estate, which is the world's largest asset class. But given their long-term horizons, housing is considered a natural fit. And now there's a new investment vehicle that aligns their stash of cash with creditworthy home buyers.

SACRAMENTO - Three years after a major influence-peddling scandal rocked California and the nation's largest public pension fund, a federal grand jury indicted two former top officials on fraud, conspiracy and obstruction charges. The indictment, unsealed Monday in San Francisco, names as defendants Federico Buenrostro Jr. of Sacramento, a former chief executive of the California Public Employees' Retirement System, and Alfred J.R. Villalobos of Reno, Nev., a former CalPERS board member and one-time deputy Los Angeles mayor.

Securities and Exchange Commission Chairman Arthur Levitt will outline an agency plan to address concern about campaign contributions by investment advisors that manage public pension funds. The SEC's staff has been preparing a rule proposal that would prohibit advisors to public pension funds from making political contributions to state and local officials who oversee those funds.

SACRAMENTO -- Corporate and public pension funds across the country are seriously underfunded, threatening the retirement security of workers and straining the already tapped finances of state and local governments, according to a pair of independent studies. A report released by the S&P Dow Jones Indices on Tuesday spotlighted record high shortfalls in corporate funds needed to pay for pensions and related post-employment benefits. Companies were underfunded by an estimated $578 billion, meaning they had only 70.5% of the money needed to meet retirement obligations, the report said.

Battered by a volatile market, the California State Teachers' Retirement System posted a 2.3% return on its investments last year. The performance, though extremely modest, was more than twice as large as that reported by CalSTRS' bigger sister agency, the California Public Employees' Retirement System. CalPERS had a return of just 1.1% on its $229.5-billion portfolio last year. The $144.8-billion CalSTRS fund had a rough year in 2011. It got a return of 0.9% on its U.S. stocks, 7.2% on bonds, 9.9% on private equity and 15% on real estate.

NEW YORK - A major shareholder vote next week has Wall Street abuzz over the power and future of Jamie Dimon, leader of the country's biggest bank. As chairman and chief executive of JPMorgan Chase & Co., Dimon burnished his reputation by steering the bank through the financial crisis virtually unscathed. Charismatic and articulate, Dimon emerged as Wall Street's most public face, an effective spokesman for an industry under siege by lawmakers, regulators and protesters. Now Dimon is facing a shareholder push to strip him of the chairman's job. Tuesday's vote at JPMorgan's annual shareholder meeting in Tampa, Fla., isn't binding, but it has nevertheless become a marquee referendum whose results could rattle nerves across the financial industry.

By next month, JPMorgan Chase & Co. will know whether shareholders want to strip the bank's star chief executive of his chairmanship. If a majority supports splitting the roles, what will Jamie Dimon do?  Dimon, who holds both jobs, declined to say in a conference call with reporters early Friday. It was an issue for JPMorgan's board, he said. "You should always listen to your shareholders,” Dimon said. "The board has plenty of time to think it through. " Some major shareholders have been calling for splitting the roles, saying it is a "best practice" for corporate governance.

NEW YORK - Does Jamie Dimon have too much power? JPMorgan Chase & Co.'s board apparently doesn't think so. Last week, its directors decided to keep Dimon as both the bank's chairman and chief executive, even after a Senate panel's scathing report about $6 billion in trading losses incurred by the so-called “London Whale.” Their decision to keep Dimon in both posts could set the stage for a rift with some big JPMorgan shareholders who support...

The pension fund for California teachers and school employees will run out of money by 2044 if lawmakers don't take drastic action, according to a new report from the Legislative Analyst's Office. The report said problems with the pension fund, known as CalSTRS, "may be state's most difficult fiscal challenge. " The costs are massive and growing. The latest estimate pegs the fund's unfunded liability at $73 billion as of June 2012, up from $64.5 billion the year before. "This is more costly the longer we wait," said Ryan Miller of the Legislative Analyst's Office during a hearing Wednesday.

SACRAMENTO - Three years after a major influence-peddling scandal rocked California and the nation's largest public pension fund, a federal grand jury indicted two former top officials on fraud, conspiracy and obstruction charges. The indictment, unsealed Monday in San Francisco, names as defendants Federico Buenrostro Jr. of Sacramento, a former chief executive of the California Public Employees' Retirement System, and Alfred J.R. Villalobos of Reno, Nev., a former CalPERS board member and one-time deputy Los Angeles mayor.

SACRAMENTO - California unions, accustomed to getting their way in the Capitol, lost some ground last year when Gov. Jerry Brown pushed through the Legislature a series of public-pension cuts that affect their members. Now several labor groups have gone to court in an attempt to reverse some of the cuts, forcing Brown to defend legislation he used to persuade voters that he was being frugal with their tax money. "We're just fighting for what has been promised us," said Jon Rudolph, president of the Deputy Sheriffs' Assn.

Voters in Switzerland, angered by high executive pay, backed a plan to increase the control of shareholders over compensation of corporate leaders. Nearly 70% of voters approved the so-called "Rip-Off Initiative," according to the Swiss television station SRF, which gives shareholders the right to vote on compensation for company directors and executives and bans bonuses bestowed on high-ranking employees when they join or leave a firm. "Today's vote is the result of widespread unease among the population at the exorbitant remuneration of certain company bosses," said Justice Minister Simonetta Sommaruga in a press conference over the weekend, according to the Associated Press.

SACRAMENTO -- The country's second-largest public pension fund is opposing the reelection of Walt Disney Co. Chairman and Chief Executive Robert Iger to the entertainment and theme-park giant's board of directors. Citing concerns about the company's corporate governance, the $158-billion California State Teachers' Retirement System, known as CalSTRS, announced Thursday that it will vote its 5.3 million shares of Disney stock against Iger and five other board members who are up for election at an annual meeting March 6. CalSTRS' holdings in Disney are worth $263 million and represent 0.3% of the company's outstanding shares.