Pension Probe

Under severe pressure to achieve greater returns on pension investments, the longtime Treasurer-Tax Collector of Orange County, California, engaged in a number of high-risk investments, which were made while consulting psychics and astrologers.

His investment pool lost $1.64 billion. Nearly $200 million had to be slashed from the county budget and more than 1,000 jobs were cut. The county was forced to borrow $1 billion and Orange County was forced into bankruptcy in 1994.

Now, Securities and Exchange Commission investigators are looking at the California Public Employees' Retirement System, known as Calpers... And whether California adequately disclosed the risky nature of Calpers' investments. During the financial crisis, the fund lost a significant portion of its portfolio, leaving the entire state of California on shaky financial ground.

The country's largest public pension fund's shakedown could send tremors through the public pension world, which is already suffering financially and under political attack as well.

NY Times reporter Louise Story Audio Embed: PRI & WNYC's program The Takeaway 1/7/11, Hosts: John Hockenberry & Celeste Headlee