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Get out your wallets, Californians. You're about to take another hit concerning those generous public pension benefits you keep hearing about.

The California Public Employee Retirement System reported another dismal investment performance, this one for the fiscal year that ended June 30. This means the public is going to have to make up the difference through higher fees and taxes and/or further cuts in government services.

Many public employees, most of them rank-and-file workers, may also take a hit through increased contributions toward their benefits.

CalPERS, the nation's largest public pension fund, reported an anemic 1 percent return on its investments, well short of its anticipated return for the year and a far cry from its rosy long-term projection of 7.5 percent a year.

Because public employee pension benefits are guaranteed and can't be reduced outside of collective bargaining, that deficiency in investment returns is going to have to be made up somewhere. This means the state, cities and agencies already strained by staff cuts and languishing revenues will have to contribute more. Those agencies will, in turn, have to further cut programs and services, reduce staff, increase fees — and/or go to voters with tax increases.

In addition, CalPERS is likely to feel more pressure to reduce its long-term discount rate, from that lofty 7.5 percent. It should. But that, too, will leave taxpayers to make up the difference between assets and promises. The state is already $85 billion behind in setting aside enough money to pay for retirement benefits handled by CalPERS. The California State Teachers' Retirement System is short by some $64.5 billion.

But there's another step that deserves more discussion than it's getting: Holding CalPERS accountable for its poor performance.

CalPERS' chief investment officer blamed the dismal results on the European debt crisis and slow growth in equity markets. There's no disputing that. But many investment funds have fared better than CalPERS.

According to a March report by a CalPERS consultant, 99 percent of the nation's largest public pension funds outperformed CalPERS over the previous five years. CalPERS' return over that period: 0.10 percent. In the year ending June 30, CalPERS even underperformed the California State Teachers' Retirement System, which reported a woeful 1.8 percent return.

It's not that CalPERS lacks financial expertise. It pays nearly $30 million a year for its internal investors. It pays another $1.2 billion in fees each year to outside money managers to help manage its $233 billion portfolio.

Yet, it's performance has been abysmal, and no one, to our knowledge, has been held accountable.

CalPERS also should have its feet held to the fire for its promise back in 1999 that the state Legislature could afford to significantly increase public employee retirement benefits without cost to taxpayers. It proved to be wishful thinking.

As David Crane, an adviser to ex-Gov. Arnold Schwarzenegger, recently wrote for Bloomberg News, the pension system has earned only 75 percent of what CalPERS had hoped. As a result, the state has spent $20 billion more on pensions than CalPERS projected. And given this latest financial report, that's going to go up.

As demonstrated by the sudden increase in cities seeking bankruptcy protection, California needs pension reform. But it also is in desperate need of CalPERS reform. Taxpayers can't afford its mistakes.