CalPERS in the News – June 2020
In spite of large gathers being banned, and many government offices being closed, CalPERS continues to operate and make news. In fact, a few big shake ups have occurred at CalPERS in the last few months.
In this article our experienced CalPERS disability retirement attorneys recap what has been moving and shaking at CalPERS, while the rest of the world is in quarantine.
#1. CalPERS Fires Top Money Managers
CalPERS is the largest US pension plan, with an estimated more than $300 billion in assets. In 2019 CalPERS decided to reshape its equity program and voted to move almost all of its assets in house. However at that time, CalPERS refused to say which money managers would be terminated.
This month it was revealed fired which major money managers were fired, in documents obtained by Chief Investment Officer under the California Public Records Act.
As part of CalPERS massive restructuring J.P. Morgan Asset Management, Fidelity, Allianz Global Investors, and Hermes Investment Management were among the money management firms terminated.
#2. CalPERS Isolates Board from Public During Coronavirus Pandemic
In light of coronavirus (COVID_19) concerns, CalPERS adopted new Public Hearing and Board Meeting protocols. Meetings have been moved to the pension plan’s auditorium – where the directors can maintain six feet away from one other.
Spectators will be put in a separate room – where they will be required to watch the meetings on television screens rather than in person.
California Public Employees’ Retirement System (CalPERS) board members will be separated from each other by six feet during board meetings next week, and the public will be put in a separate due to concerns about the new coronavirus outbreak.
This decision was released in March by Marcie Frost, the pension system’s chief executive officer, in a letter to CalPERs board members – also obtained by the CIO through an FIA request.
Both the very important the CalPERS Investment Committee conducted on March 16 and the full 13-member board meeting conducted on March 18 were held in the pension plan’s auditorium at its main headquarters in downtown Sacramento.
#3. CalPERS Changes Asset Allocation – June 16, 2020
In June 2020 CalPERS officially revised its Fixed Income and Public Equity Investment Policies. The new financial policies aim to move away from “return-oriented goals’ (i.e. maximum returns on investments) and instead focus on being a source of liquidity (“availability as needed” as well as and strong beta (lowering risk or volatility).
One element of the change in policy was a division of the pension’s Global Equity Program between a “market capitalization weighted segment” and a “factor weighted segment”.
The primary purpose of the market capitalization weighted segment was to provide the portfolio with “high beta” – i.e. more risk but also higher return potential correlated with economic growth. This segment also offers greater liquidity or “availability” of funds.
The factor weighted segment, on the other hand, is intended to have reduced volatility or “stock market swings”, while still providing high potential for returns.
#4. CalPERS Board Member Sues over Alleged Retaliation
Margaret Brown, a long-time members’ right advocate – and one of only 2 member-elected CalPERS Board Members – filed a lawsuit alleging retaliation.
Ms. Brown claimed in her lawsuit that she was wrongly punished in efforts “to silence one of the only watchdogs on the CalPERS board”. You can read ar=our full analysis and recap of this legal action against CalPERS HERE.
CalPERS Disability Retirement Attorneys
While these CalPERs financial policies may not seem to affect you personally, the disability retirement attorneys at the Long Beach firm of Cantrell Green monitor and analyze them carefully. CalPERs financial viability influences how CalPERS administers your retirement fund – and could eventually affect your benefits!
Rest assured that our CalPERS disability retirement attorneys keep abreast of what goes on “behind the scenes” in order to give you the best advice possible in terms of your disability retirement and pension benefits.
If you have any questions about your disability retirement benefits, feel free to give our attorneys a call to set up an appointment. If you are injured on the job close to the time you intend to retire, we would be happy to help you determine your eligibility for disability retirement under the CalPERs system.
CalPERs Disability Retirement Attorney: 562-622-4800
This article applies to members of California Public Employees’ Retirement System (CalPERS); and does not reflect the rules, laws or regulations governing how other public retirement systems are administered. If you have question about another public employee retirement system, find your system, below – or call our attorneys at: 562-622-4800