San Diego does face a crisis: Its pension fund is woefully short of money. Assets equal about two thirds of liabilities -- a funding ratio that is one of the worst in the country. Overall, the city faces debts that represent 93 percent of its fiscal 2005 budget.

As Senior Editor Steven Brull reports ("In the Eye of the Storm," page 46), citizens' groups and city officials are pointing fingers in various directions, even as federal authorities investigate the possibility of misfeasance.

And yet the great twist of this story is what hasn't been said or written. The problems of the city may concern the pension fund -- but they were not caused by it. Quite the opposite, in fact. The investment management performance of the San Diego City Employees' Retirement System has been exceptional. Under the guidance, for the past 12 years, of CIO Doug McCalla, San Diego Retirement has handily bested its peers and benchmarks, turning in well-above-average returns in bull and bear markets. In his story Brull examines how McCalla, a veteran civil servant who began his career sweeping public basketball courts, compiled his remarkable track record, crafting an idiosyncratic rebalancing program and relying exclusively on active managers.

Indeed, McCalla's strong performance may have been one reason the city felt so comfortable in taking the actions that ultimately threatened the safety net of its retirees: reducing its annual contributions to the fund while hiking benefits. That pattern of mismanagement has been repeated in other municipalities -- and companies -- across the nation, calling into question the judgment of many fiduciaries. In San Diego's case, the irony feels particularly pointed: McCalla's achievements rarely show up in the stories written about San Diego's problems. Disappearances can be deceiving.