Nation’s Largest Pension System Faces Uncertain Future With Multibillion-Dollar Deficit

With 28 percent of what it owes to members unfunded, California’s state employee pension system of $465 billion in assets is facing significant headwinds.

A sign stands in front of California Public Employees' Retirement System building in Sacramento, Calif., on July 21, 2009. Max Whittaker/Getty Images

Changing demographics and a weak economy are threatening the future of California’s state employee pension system, according to some economists.

Some are asking questions about the system’s structure and why investments have performed poorly in recent years.