Calpers is short for California Public Employees' Retirement System. But everyone calls its Calpers, perhaps because the official name is too long. Calpers is losing a lot of money on risky land deals, and the state ought to be asking what the money was doing in volatile investments. All those retired people and those about to retire ought to ask the same thing.

Looking at how Caplers used its money, The Wall Street Journal writes "It aggressively poured money into real estate. As a result, today it's one of the biggest owners of undeveloped residential land in America." So, like a lot of college endowment, it is looking at real trouble funding its obligations. In the case of Calpers things are so bad that local governments in the state may have to come up with money to help people as they move into their golden years. Those governments are already running deficits because of the California's deep recession.

It is extraordinary that retirement funds and school endowments don't have strict rules about how money is invested. In a boom, the firms would miss out on some of the out-sized returns, but at least they would still be standing when the market faltered badly. Pension funds should not ever be in a position where they can destroy the savings of their members.

Calpers will not be the last of these retirement funds to blow up. And, a lot of folks who need the money will be left out in the cold--literally.

Douglas A. McIntyre is an editor at 247wallst.com.