Pension problems

For all those government employees and teachers: How do you fell about your retirement money being used to purchase the state's debt?

Well, that's one suggestion by a California lawmaker, according to the Sacramento Bee.

With California's wallet emptying out faster than the cash is trickling in, state officials scrambling to pay the bills have set their sights on new lending sources: California's two biggest public pension funds.

Sen. Dean Florez, D-Shafter, has proposed that the California Public Employees' Retirement System purchase the state's looming debt. The money would keep California operating - including paying state employee payroll and funding schools - into next year.

Florez outlined the plan in a letter to state Treasurer Bill Lockyer on Friday. Lockyer spokesman Tom Dresslar on Monday said his boss will also float the idea to the California State Teachers' Retirement System. Lockyer sits on the boards of both funds.

"I just thought, 'Nobody is talking about CalPERS as a possible investor,' " Florez said Monday. "They might be able to get us a better deal than the banks, and we might be able to give them a better return on their investment than the stock market, especially right now."

But the idea doesn't sit well with everyone.

"If the state can't borrow money from the credit markets, why would CalPERS be interested?" said Keith Brainard, research director for the National Association of State Retirement Administrators.