California Public Employees' Retirement System

California Public Employees' Retirement System
Coolcaesar at English Wikipedia · CC BY-SA 3.0 · source
Name	California Public Employees' Retirement System
Type	Public pension fund
Location	Sacramento, California
Assets	$440 billion
Members	2 million

California Public Employees' Retirement System is a public pension fund that provides retirement benefits to public employees in the state of California, including those working for the State of California, California State Legislature, California Department of Education, and University of California systems. The system is one of the largest pension funds in the world, with assets totaling over $440 billion, and serves over 2 million public employees, including those from Los Angeles County, San Diego County, and City of San Francisco. The system is governed by a board of directors that includes representatives from the California State Teachers' Retirement System, California Department of Finance, and Office of the California State Controller. The system's investments are managed by a team of experienced professionals, including those from BlackRock, Vanguard Group, and State Street Corporation.

History

The California Public Employees' Retirement System was established in 1932, with the passage of the California State Legislature's County Employees Retirement Act, which allowed counties to establish retirement systems for their employees. The system was initially funded by employee contributions and employer contributions from the State of California and counties. Over the years, the system has undergone several changes, including the addition of new benefit plans and the expansion of eligibility to include more public employees, such as those from California State University and California Community Colleges. The system has also been influenced by major events, such as the Great Depression, World War II, and the 2008 financial crisis, which affected the global economy, including the New York Stock Exchange, London Stock Exchange, and Tokyo Stock Exchange.

Investments

The California Public Employees' Retirement System invests its assets in a variety of asset classes, including stocks, bonds, real estate, and private equity. The system's investment portfolio is managed by a team of experienced professionals, including those from Goldman Sachs, Morgan Stanley, and J.P. Morgan Chase. The system's investments are guided by a long-term investment strategy that aims to maximize returns while minimizing risk. The system has also made significant investments in sustainable energy and environmental initiatives, such as those promoted by the United Nations Environment Programme, World Wildlife Fund, and The Nature Conservancy. Additionally, the system has invested in companies such as Apple Inc., Microsoft Corporation, and Alphabet Inc., which are leaders in the technology industry.

Benefits

The California Public Employees' Retirement System provides a range of benefits to its members, including retirement benefits, disability benefits, and survivor benefits. The system's benefit plans are designed to provide a secure retirement for public employees, including those from California Highway Patrol, California Department of Corrections and Rehabilitation, and California Department of Forestry and Fire Protection. The system's benefits are funded by a combination of employee contributions, employer contributions, and investment earnings. The system has also partnered with organizations such as AARP, National Association of State Retirement Administrators, and International Foundation of Employee Benefit Plans to provide educational resources and retirement planning tools to its members.

Governance

The California Public Employees' Retirement System is governed by a board of directors that includes representatives from the California State Legislature, California Department of Finance, and Office of the California State Controller. The board of directors is responsible for setting the system's investment strategy and overseeing the management of its assets. The system is also subject to oversight by the California State Auditor, California Department of Insurance, and Securities and Exchange Commission. The system has also established a committee on investments and a committee on benefits to provide guidance on investment decisions and benefit plan design.

Criticisms_and_controversies

The California Public Employees' Retirement System has faced several criticisms and controversies over the years, including concerns about the sustainability of its benefit plans and the management of its investments. The system has been criticized by organizations such as the Reason Foundation, Pacific Research Institute, and California Policy Center for its investment strategies and benefit plan design. The system has also faced challenges related to the funding status of its benefit plans, including the impact of the 2008 financial crisis on its investment portfolio. Additionally, the system has been involved in high-profile lawsuits, such as those related to the Enron scandal and the Bernard Madoff investment scandal.

Financial_performance

The California Public Employees' Retirement System has reported significant investment returns over the years, with an average annual return of around 7%. The system's investment portfolio has been diversified across a range of asset classes, including domestic stocks, international stocks, and alternative investments. The system has also reported a funding status of around 70%, which is below the actuarial target of 100%. The system's financial performance has been influenced by major events, such as the dot-com bubble and the 2008 financial crisis, which affected the global economy, including the Dow Jones Industrial Average, S&P 500, and NASDAQ. The system has also been recognized for its excellence in investment management by organizations such as Institutional Investor, Pensions & Investments, and Chief Investment Officer.