Yes, it's come down to this: The nation's largest public pension fund needs cash. As explained by the WSJ, Calpers has to meet commitments to various investors - among them private equity firms and real estate partners - and only 2 percent of its assets on hand is in cash. That’s not enough to cover its obligations, so a bunch of stocks are being sold - fast. From the Journal:

Under normal conditions, pension funds count on some private-equity partners to distribute investment gains, while pensions owe some partners more capital. During the recent market selloff, however, distributions have dried up while capital calls continue. That's created a mismatch and a cash strain. Since the credit markets have tightened up and real estate and alternative investments aren't very liquid, Calpers has been compelled to sell off stocks to raise large sums quickly. Those sales are turning paper losses into realized losses.

This need to raise cash quickly could partially explain why stocks have fallen so sharply so quickly. Hedge funds face much the same problem because many of them are so highly leveraged. And because they don't have to file financial reports, no one knows how many more of their dominoes will fall.