Mandatory reading

Charles Schwartz's latest installment on the UCRP is mandatory reading for anyone worried about the performance of UC's pension fund.  President Yudof has been rebutting calls for more "shared governance" in the management of UCRP investments by pointing out that UCRP is doing just fine, thank you, and that UC faculty and staff have nothing to worry about. In particular, Yudof points out that

For the decade ended June 30, 2009, UCRP’s total return exceeded that of the benchmark by 30 percent, whereas for the previous decade the return exceeded benchmarks by only 4 percent.

This is because the 2001-2009 annualized return was  2.30% against a 1.77% benchmark (+.53%), whereas the 1991-2001 return was 13.9% against a 13.3% benchmark (+.6%).

This way of representing the annualized return is just meaningless crap: if the benchmark had been 0% even a .001 return would have been infinitely better (no doubt justifying even higher incentive pay for the Treasurer and even more astronomical fees for the external investment managers).

In fact, Schwartz compares UCRP's performance against that of a peer group  (the way it used to be before UC Treasurer Patricia Small was forced to resign so that the University could retain brokerage firms earning fat fees and commissions). Schwartz's conclusion:

The overall picture from this data is that there was much better performance, relative to peers, in the earlier years than there has been in the last decade.

So, if anybody needed any more reason to be worried about the way the University plays with our retirement money, look no further.