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Stacey Vanek-Smith: One goal of that financial reform bill is to make the markets safer for big investors like pension funds. But that is not going to help the problem pensions are facing right now, as Jennifer Collins reports.

Jennifer Collins: Beverly Miller spent many years teaching in Southern California. Now she spends her retirement keeping up her house in San Diego. And for a while, she patrolled the city as a volunteer policewoman. She wore a uniform.

Beverly Miller: But they don't let you shoot anybody.

She didn't need money because CalPERS, California's generous state retirement system, pays retirees like her an average of $25,000 a year.

It's not clear how long CalPERS can keep that up. During the financial crisis, CalPERS funds lost more than a fifth of their value. CalPERS lost hundreds of millions on complex securities and shaky real estate deals. Miller says she wants CalPERS to rein in that risky investing.

Miller: I don't go to the track and I don't go to casinos. And I don't think CALPERS belongs there either.

Anne Simpson is a senior portfolio manager at CalPERS. She's been jetting between Sacramento and the East Coast as she works to make investing safer.

Anne Simpson: Ah where am I? Haha. I'm at JFK at the airport just about to get back on the plane.

Simpson wants tougher oversight of the financial system.

Simpson: Getting derivatives regulated and transparent is key and I think also setting up a systemic risk regulator is very important to us as well.

But financial reform may not be the whole answer. Financial consultant Alan Biller says CalPERS is in a tricky situation. It might not be able to keep providing generous benefits unless it keeps going out on a limb.

Alan Biller: There's always pressure for managers to take more risk for higher returns.

CalPERS may require new workers to pay in more money and retire later. CalPERS may require new workers to pay in more money and retire later. Biller says: that's exactly what pension funds need to do. Otherwise, they could end up making the same investment mistakes all over again.

I'm Jennifer Collins for Marketplace.