"In the near term, it's not good; in the long term it's an opportunity," CalPERS chief investment officer Joseph Dear said Tuesday in an early morning appearance on CNBC television.

The market volatility, Dear said, is being driven by emotion about a weak economy and government debt, not an economic catastrophe like the credit freeze of 2008.

"It's not a bright picture, but it's not doom and gloom," he said.

CalPERS would not make Dear available for interviews later Tuesday.

It wasn't immediately clear what the losses meant for the overall value of the CalPERS fund. The losses came from stocks, which make up only about half of the fund's total portfolio.

The California State Teachers' Retirement System also sustained losses, but spokesman Ricardo Duran declined to say how large they were. The fund had moved some investments out of the stock market as a defensive move before the downturn, but is monitoring the situation and not making any aggressive moves to buy or sell stocks for now, he said.

In July, both CalPERS and CalSTRS reported investment gains of more than 20 percent for the fiscal year ended June 30, largely driven by stock values. CalPERS assets grew by $37 billion to $237.5 billion; CalSTRS added $29 billion to reach $154.3 billion.

The increase came as both funds were clawing their way back from huge losses in 2008-2009, which cost them as much as one-third of their asset value.

Funding for public pensions has become a subject of hot debate across the country, with critics arguing that they force taxpayers to support guaranteed benefits for public workers that are far richer than private sector employees can expect. Many pensions are underfunded and when asset values decline, critics argue, the pension funds still have to pay benefits, with taxpayers making up the shortfall.

Pension supporters say investment returns even out over time and a focus on short-term gains and losses is short-sighted.

Stocks rallied Tuesday, but were still below their levels of about three weeks ago, before global economic weakness and the furor over U.S. government debt pushed the market down a steep hill.

Pension critics say those sharp losses point up the problem with financial models that assume an investment return of more than 7 percent each year.

"Taxpayers are left holding the bag," state Sen. Bob Huff of Diamond Bar, chief budget negotiator for California's Senate Republicans, said Tuesday.