Pension Funds to Reject Kmart Stock Plan: The California Public Employees' Retirement System and New York City's pension fund said they will join several other large shareholders in voting against Kmart Corp.'s proposal to issue new classes of stock in its specialty retail divisions. CalPERS will also vote against Kmart management's slate of five incumbent directors to "express dissatisfaction with the board's stewardship," said Jose Arau, principal investment officer for CalPERS. The $82-billion fund, the largest public pension fund in the United States, owns 2.3 million Kmart shares. New York City's $50-billion pension fund will vote against the stock plan but not against the board. It owns 2.8 million Kmart shares.