Bloomberg News

Calpers Gains 14% as Biggest Pension Nears End of Fiscal Year

June 20, 2013

The California Public Employees’ Retirement System, the largest U.S. public pension, reported a 14.3 percent gain on invested assets for the first 10 months of its fiscal year as stocks soared to records.

The fund’s performance through April, announced yesterday by Theodore Eliopoulos, the senior investment officer for real assets, means the $261.6 billion fund is set to beat its assumed 7.5 percent rate of return for a second consecutive year. Its assets gained 13.3 percent in fiscal 2012, which ended June 30.

The increase so far this year “reflects very strong performance of public equity over the last 10 months,” Eliopoulos said at a meeting of the fund’s board in Sacramento. The Standard & Poor’s 500 Index (SPX) of U.S. stocks had a total return of about 17 percent in the same period, touching 1,597.57 on April 30, a record that has since been eclipsed.

The pension, known as Calpers, in May passed its pre-recession high of $260.6 billion in assets, five years after the global financial crisis wiped out more than a third of its value. Local governments and state agencies have been forced to help make up the loss to cover benefits promised to public employees. The system serves about 1.7 million members.

Separately, the board approved rate increases averaging about 3 percent for members’ health-care insurance in 2014.

Calpers, fully funded when the recession began in December 2007, had about 74 percent of the money needed to meet long-term commitments as of June 2011, the most recent figure available.

Eliopoulos, 49, took over day-to-day investment operations from Chief Investment Officer Joe Dear, 62, who is being treated for prostate cancer, the fund said June 14.

To contact the reporter on this story: Michael B. Marois in Sacramento at mmarois@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net


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