CallERS uses an assumed rate of return of 7.75%.
CalPERS returns for the five prior years:
add in the 20.7% estimate for FY 2011 and they've shown a total return of 31.12%.
Unfortunately their return assumptions told them they would show a total return of 56.525% over the period, resulting in a pretty large shortfall.
From the Los Angeles Times' Money & Co. blog:
The nation’s two largest pension funds both posted their best returns in more than a decade.
The California Public Employees' Retirement System pension fund grew 20.7% in the fiscal year ended June 30, its best return in 14 years. The California State Teachers’ Retirement System fund increased 23.1%, the best it has done in a quarter of a century.
Despite the record increases, neither fund has recovered the massive losses they both experienced during the financial crisis and the returns will not immediately lower the contributions expected from employees or the state....MORE