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Category
California Public Employees’ Retirement System (CalPERS)

US Public Employee Pension Fund

Location: Sacramento, California (state capital) 

Established: 1932, by state law

Estimated asset base:  USD$237.6 billion as of February 29, 2012

FOCUS
CalPERS is the largest (in size of asset base) state pension fund in the United States of America.  The California economy alone -- separate of the USA -- is among the 10 largest economies in the world. CalPERS is a significant institutional investor in the USA and in other economies.The California Public Employees’ Retirement System describes its work in defined benefit retirements plans:   “We provide retirement, health, and related financial programs and benefits to more than 1.6 million active and retired public employees, and their families on behalf of  3,000 public employers.”  Health benefits are provided to over 1.3 million members.The scope of CalPERS activities has grown over the years: The System was established to provide retirement benefits to state employees but later added public agency and school employees, and expanded into providing health programs.The assets value of the CalPERS fund stood at USD $237.6 million in early March, 2012, up from about USD$200 billion at the end of October 2009.

STRUCTURE AND INVESTMENT BASICS:

CalPERS employed 2,366 people as of July 1, 2011.

A 13-member Board of Administration manages the System’s assets with guidance from a 270-person investment office staff plus members of the System’s management team. Board Members are either elected by members of the System, appointed, or are designated by law to be on the Board. The Board has established various Committees that review issues and recommend actions to the full Board. The Board meets monthly in Sacramento, but holds one meeting a year in Southern California.

CalPERS also utilizes the services of external asset managers to oversee certain domestic and international equity investments as well as the alternative investment program.

 

METHODOLOGY AND INVESTMENTS

Asset class allocations are listed, as of May 2012: 

  • Growth: 64 %; (Public Equity 50 %; Private Equity 14 %;)
  • Income:17 % 
  • Real estate 9 %
  • Infrastructure: 1 %
  • Liquidity: 4 %
  • Inflation related: 3 %
  • Absolute Return Strategy: 2 %

CalPERS invests a portion of its assets in California; These in-state investments and commitments totaled USD $23 billion as of February 29, 2012, divided as follows:

  • USD $4.8 billion in real estate;
  • USD $14.7 billion in growth
  • USD $3.5 billion in income

 


STAFF / ANALYST TEAM/ INDUSTRY AND TECHNICAL KNOWLEDGE

Chief executive officer is Anne Stausboll, who has served in other positions at CalPERS after working as chief deputy treasurer to the California state treasurer. She has a law degree and sits on the board of Ceres; she also served on the governing board of the United Nations Principles for Responsible Investment (PRI) during 2006-2009.

Joseph A. Dear began serving as chief investment officer in March 2009 after working as executive director of the Washington State Investment Board. (The interim chief operating investment officer was Kenneth W. Marzion, a veteran CalPERS employee.) Dear is also board chair of the institutional investment group, Council of Institutional Investors (CII). 

Cheryl Eason was appointed to the new position of chief financial officer of CalPERS in mid-October 2012. Eason came to CalPERS from the British Columbia Pension Corporation (online press release). 

Robert Feckner, President of the CalPERS Board of Administration, is a glazing specialist at Napa Valley Unified School District and has served on the Board for over a decade.

TRANSPARENCY – GOVERNMENT – SRI – OTHER FACTORS

Transparency & Information Accessibility: The CalPERS Web site has traditionally provided copious information to visitors, considerable background on the organization and its mission. Unfortunately, navigation can be confusing for some information and not all information is consistently updated in all locations: data may be available, but they are not always as easily accessible as they might be.

Governance: The CalPERS Board of Administration consists of 13 members.

Governance and investing: CalPERS has a structured Corporate Governance Program that “focuses on highly concentrated portfolios and incorporates an active engagement strategy to unlock value through operational, strategic, and governance changes.” The program covers the US, Europe, UK, Japan, and Korea.

CalPERS has established a separate governance Web site -- CalPERS Corporate Governance -- and hired its first corporate governance chief, Anne Simpson, in January 2009.

The organization usually names underperforming companies [in portfolio] each spring for special attention, compiling them into a "Focus List."  (see Recent News below)

Sustainable and Responsible Investment / SRI: CalPERS has been involved in a series of efforts related to socially responsible investing, and is committed to participation in the Investor Network on Climate Risk (INCR, managed by Ceres), support of the Carbon Disclosure Project (CDP) and Water Disclosure Project, and the continued implementation of its own engagement program. Other programs include investment in environmental technologies, investing in “stock portfolios that use environmental screens,” and developing environmental strategies for real estate investments.

Note that as a health care services provider and insurer, CalPERS takes great interest in healthcare issues, and has leverage in negotiating with companies in its investment portfolios, where it is both customer and investor – and governance and ESG activist. 

RECENT NEWS

January 23, 2012----The California Public Employees’ Retirement System (CalPERS) Board of Administration unanimously re-elected Rob Feckner as Board president and George Diehr as vice president for 2012 during the Pension Fund’s annual winter offsite Board meeting. Terms for the president and vice president are one calendar year. Feckner is serving his eighth term as president and Diehr is serving his fifth term as vice president. Feckner is elected to the CalPERS Board by the Pension Fund’s school members. He was first elected in 1998. In addition to being Board president, Feckner chairs the Board’s Governance committee, is vice chair of the Benefits and Program Administration committee, and is a member of the Investment, Health Benefits, and Ad Hoc Risk Management committees.
Feckner has worked for the Napa Valley Unified School District for the past 35 years. He is also the past president of the California School Employees Association and is currently executive vice president of the California Labor Federation.

May 24, 2012---The California Public Employees’ Retirement System (CalPERS) has reached out to major shareowners of Nabors Industries, Chesapeake Energy, and New York Community Bancorp asking for support of the pension fund’s shareowner proposals to make corporate governance changes at the three companies. Chief among CalPERS concerns are executive compensation, supermajority and plurality voting requirements. “As owners of these companies we take governance seriously,” said Anne Simpson, Senior Portfolio Manager and Director of Corporate Governance. “Governance underpins long-term sustainable risk-adjusted returns, so these reforms are sorely needed.”

CONTACT

CalPERS
Lincoln Plaza North
400 Q Street
Sacramento, CA 95811
Tel 916-795-3829
Web http://www.calpers.ca.gov/
Mailing addresses are listed at
http://www.calpers.ca.gov/index.jsp?bc=/utilities/contact/hqs-addresses.xml

Profile prepared: April 2009.
Updated: July 2011; May 2012, October 17, 2012.

 

 

This profile was created by the Institute using (primarily) publicly-available information.  Certain insights were included based on the experience of Institute staff and its network of subject matter experts (SMEs).  The profiles in INSIGHTS-edge are regularly updated with current information.

 

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