California Public Employees' Retirement System Board

California Public Employees' Retirement System Board
Name	California Public Employees' Retirement System Board
Type	Public pension board
Formed	1932
Jurisdiction	State of California
Headquarters	Sacramento, California
Parent agency	California Public Employees' Retirement System

California Public Employees' Retirement System Board

The California Public Employees' Retirement System Board is the governing body that oversees the administration and investment of the retirement benefits for public employees in the State of California. It operates within a legal and institutional framework that connects the Legislature, the Governor, the Franchise Tax Board, the Attorney General, and numerous public agencies and municipal entities. The Board’s decisions intersect with major financial institutions, regulatory agencies, and public policy debates involving entities such as the University of California, Los Angeles, the California State Senate, the California State Assembly, and federal actors including the Securities and Exchange Commission.

Overview

The Board governs one of the largest public pension funds in the world, interacting with institutions like the University of California, Stanford University, Harvard University, Princeton University, Yale University, Columbia University, Massachusetts Institute of Technology, New York University, University of Pennsylvania, and California State University. Its remit ties to state entities including the Office of the Governor of California, the California Department of Finance, the California State Controller, the California State Treasurer, the California Department of Human Resources, and the California Public Utilities Commission. The Board’s scope requires coordination with municipal governments such as the City and County of San Francisco, the City of Los Angeles, the County of Los Angeles, the City of Sacramento, and regional authorities like the Bay Area Rapid Transit District and the Metropolitan Transportation Authority. Its investment, legal, and policy relationships extend to global counterparts including the World Bank, the International Monetary Fund, the Bank of England, the European Central Bank, the People's Bank of China, the Bank of Japan, the Federal Reserve Board, and the Federal Reserve Bank of San Francisco.

Composition and Appointment

Membership reflects appointments and elections involving the Governor of California, the California State Senate, the California State Assembly, and various employee associations such as the Service Employees International Union, the California Teachers Association, the American Federation of State, County and Municipal Employees, and the California Correctional Peace Officers Association. Appointees have included people with ties to institutions like Stanford Law School, Harvard Law School, UC Berkeley School of Law, Yale Law School, Columbia Law School, Georgetown University Law Center, and the University of Chicago Booth School of Business. Elections and confirmations connect to the California Secretary of State, county registrars, and legal oversight from the California Attorney General and courts such as the California Supreme Court and the United States District Court for the Northern District of California. Board structure mirrors practices seen in pension governance at the New York State Common Retirement Fund, the Teacher Retirement System of Texas, the Florida Retirement System, the Ontario Teachers' Pension Plan, and the California State Teachers' Retirement System.

Roles and Responsibilities

The Board sets policies affecting beneficiaries represented by unions like the California Federation of Teachers, the California Nurses Association, the California State Sheriffs' Association, the California Association of Highway Patrolmen, and the California School Employees Association. Responsibility extends to actuarial coordination with firms and institutions such as the Society of Actuaries, the American Academy of Actuaries, Milliman, Mercer, BlackRock, Vanguard Group, State Street Corporation, Goldman Sachs, Morgan Stanley, JPMorgan Chase, and Citigroup. The Board oversees administration functions that engage software and service providers like IBM, Oracle, Microsoft, Accenture, and Deloitte, while complying with laws such as the California Public Employees' Retirement Law, the Employee Retirement Income Security Act, the California Public Records Act, the Brown Act, and the California Environmental Quality Act.

Governance and Decision-Making Processes

Decision-making involves interactions with the Office of Administrative Law, the Legislative Analyst's Office, the California State Auditor, the Government Accountability Office, the Public Company Accounting Oversight Board, the Financial Accounting Standards Board, and auditors including Ernst & Young, PricewaterhouseCoopers, KPMG, and Grant Thornton. The Board’s governance integrates input from advisory bodies such as the Investment Committee, the Audit Committee, the Governance Committee, and external advisory councils tied to academic institutions like the USC Sol Price School of Public Policy and the UC Berkeley Haas School of Business. Meetings comply with parliamentary procedures akin to those in the United Nations, the California Legislature, and municipal councils of San Diego and San Jose, and are subject to media scrutiny by outlets like the Los Angeles Times, The New York Times, The Wall Street Journal, Bloomberg, Reuters, and the Associated Press.

Investment Policy and Strategy

Investment strategy spans asset allocation across public equities, fixed income, credit, real assets, private equity, and infrastructure, drawing comparisons with strategies used by the Alaska Permanent Fund Corporation, the California State Teachers' Retirement System, the Teacher Retirement System of Texas, Norges Bank Investment Management, and the Canada Pension Plan Investment Board. The Board engages with index providers and exchanges including MSCI, S&P Dow Jones Indices, the New York Stock Exchange, NASDAQ, London Stock Exchange Group, Hong Kong Exchanges and Clearing, and Tokyo Stock Exchange. Risk management and stewardship relate to institutions and frameworks such as the Intergovernmental Panel on Climate Change, the Task Force on Climate-related Financial Disclosures, the International Finance Corporation, the International Monetary Fund, the World Economic Forum, and the United Nations Environment Programme Finance Initiative. Transactions and custody involve custodians and counterparties like State Street, BNY Mellon, Northern Trust, BlackRock, Goldman Sachs, Morgan Stanley, and UBS.

Accountability, Oversight, and Controversies

Oversight and controversies have involved interactions with the California State Auditor, the California Attorney General, the United States Securities and Exchange Commission, Department of Justice investigations, state legislative hearings in the California State Assembly and Senate, and litigation in courts such as the California Supreme Court and federal district courts. High-profile controversies have referenced firms and events such as CalPERS’ engagements with private equity managers like KKR, The Carlyle Group, Blackstone, Apollo Global Management, and Bain Capital, proxy battles involving corporations like ExxonMobil, Chevron, Apple, and Facebook, and debates over environmental, social, and governance policies promoted by groups including the Sierra Club, Natural Resources Defense Council, Greenpeace, and the White House Council on Environmental Quality.

Historical Development and Notable Actions

The Board’s history intersects with state political milestones involving Governors such as Earl Warren, Pat Brown, Ronald Reagan, Jerry Brown, Arnold Schwarzenegger, and Gavin Newsom, legislative reforms in the California Legislature, and court decisions stemming from the California Supreme Court and federal appellate courts. Notable actions include large-scale investment decisions, participation in landmark shareholder resolutions at companies like Wells Fargo, Bank of America, Citigroup, Microsoft, Google, and Tesla, and policy shifts responding to macroeconomic events such as the Great Depression, the Great Recession, the dot-com bubble, the 2008 financial crisis, the COVID-19 pandemic, and ongoing climate change implications highlighted by the Intergovernmental Panel on Climate Change and the United Nations Framework Convention on Climate Change.

Category:Public pension boards in the United States