Feb 13 The California Public Employees'
Retirement System announced on Monday that it had a lower return
of about $900 million since September, when the fund reduced
risk from the portfolio by selling some equities.
CalPERS Chief Investment Officer Ted Eliopoulos said during
a board meeting on Monday that he wanted to "allay some of the
anxiety and fears" by reminding the board that "our practice
require us to take much longer periods of time into account."
CalPERS decided in September to reduce some volatile stocks
and private equity from its portfolio. Over the four months
following until Dec. 31, the fund made more than $12 billion in
net equity sales, according to fund documents. During that time,
it experienced a lower return of approximately $900 million.
The nation's largest public pension fund hopes to avoid
another calamity like the one it experienced during the 2008
recession, when its funding status dropped to 61 percent from
100 percent. Today, the funding status is 63 percent.
On Monday, CalPERS Board Member Theresa Taylor said, "I know
we are risk adverse." But she urged the fund to also consider
its options "to not be leaving money on the table."
CalPERS expects a 5.8 percent annual investment return under
its new portfolio asset allocation, significantly lower than the
fund's assumed rate of return of 7 percent by 2020.
The fund plans to make up for lower returns expected in the
coming decade over the next 30 years or more.
(Reporting by Robin Respaut; Editing by Alan Crosby)