California Public Employees Retirement System

The nation's largest pension fund, the California Public Employees' Retirement System, has postponed a decision on whether to sell some $564 million in tobacco stocks, a fund spokesman said Tuesday. CalPERS will reconsider the issue Oct. 16.

At nearly twice the estimated cost and a year late, a new computer system for the state's giant public pension fund is scheduled to go live Monday, tracking the contributions, healthcare coverage and retirement benefits for 1.6 million members. Officials at the California Public Employees' Retirement System hope the complex $507-million project, dubbed My CalPERS, will work as planned, though they expect start-up problems with software. "It won't be perfect on Day 1, but we do have a solid plan for continued improvement," Karen Ruiz, the fund's project manager, told the CalPERS board last week.

CalPERS Reports 20.1% Return for Year: The California Public Employees' Retirement System said the return on its investments for the fiscal year ended March 31 compares favorably with the 8% earned for the previous year. The $99.6-billion public pension fund, the nation's largest, attributed the results to a shift in assets toward the higher-returning equity markets. The fund's equity holdings showed a return of 26.8%.

The subprime litigation nightmare that Bank of America Corp. inherited with its acquisition of Countrywide Financial Corp. was compounded Thursday when 16 investors — including the giant California Public Employees' Retirement System — brought a new lawsuit alleging that Countrywide misled them about the risks it was taking. The suit filed in federal court in Los Angeles is a setback for Bank of America, which has sought to put the subprime morass behind it by striking settlements with a range of securities holders.

CalPERS' Official Stepping Down: Richard H. Koppes, the No. 2 man at the $99-billion California Public Employees' Retirement System, said he will resign effective July 31 to teach law at Stanford University and serve as a consultant. "I'm leaving because I've been there 10 years and I have these wonderful opportunities," said Koppes, 49, general counsel and deputy executive officer at the nation's largest public pension fund, which is known as CalPERS.

The nation's biggest public pension fund is building a home on the Internet. In doing so, the $100-billion California Public Employees' Retirement System, or CalPERS, may pave the way for other public pension funds to use cyberspace to get in touch with their beneficiaries. CalPERS is following a growing number of pension funds that find the Internet is a good way to get information to their members and the investment community.

The California Public Employees' Retirement System, one of the nation's largest pension funds, said Tuesday that it will suspend trading U.S. Treasury securities with Salomon Bros. Inc., the scandal-plagued Wall Street investment firm CalPERS, which manages a $64-billion pension fund for state workers, said its board took the action to express "outrage and disappointment" in Salomon's illegal activities. Salomon has admitted breaking the rules at Treasury market auctions.

In a development that could breathe new life into the nation's moribund home construction industry, the California Public Employees' Retirement System said Monday that it would become one of the first public employee pension funds in the country to invest in single-family residential development.

When big investment firms want to tap public pension funds for money, they often put in a call to Alfred J.R. Villalobos. From a modest office near Lake Tahoe's casinos, Villalobos has spent years helping Wall Street players like Apollo Management gain access to the vast wealth held by the California Public Employees' Retirement System and other funds. By his own estimate, Villalobos netted his clients at least $16 billion in capital through 2005. His two firms have earned about $53 million in fees from investment funds that did business with CalPERS over the last seven years, records show, a sum that impresses even hardened veterans of state politics.

Students of the fine art of pointing fingers know that the key thing is to not make yourself look like an idiot in the process. By that standard, the California Public Employees' Retirement System just flunked. In a lawsuit filed this month in state court, CalPERS blamed the three major credit rating agencies, Moody's Investors Service, Standard & Poor's and Fitch Ratings, for its recent billion-dollar investment loss in three complex mortgage funds.

California's political watchdog agency has opened an investigation into gifts to state pension officials from private equity fund managers. The state's Fair Political Practices Commission is conducting the investigation, made public Monday, that focuses on executives at the California Public Employees' Retirement System. Last week CalPERS Chief Executive Anne Stausboll told administrators at the pension fund that some senior executives may have failed to report gifts properly on annual statements of economic interest filed with the state.

In the wake of alleged bribe payments, the scandal-plagued California Public Employees' Retirement System has ended contract renewal negotiations with a company that administers prescription drug benefits for 300,000 members. A CalPERS internal investigation report released earlier this week alleged that Medco Health Solutions Inc. paid more than $4 million in what was called "consulting" fees to win the original contract in 2006. The money was allegedly paid in secret to Alfred J.R. Villalobos, a former CalPERS board member turned dealmaker.

California's public pension fund severed ties Monday with a major investment manager that had close ties to Alfred J.R. Villalobos, the former pension fund board member who is now accused of fraud. Pacific Corporate Group of La Jolla oversaw $2.5 billion worth of investments by the California Public Employees' Retirement System. The decision to end the relationship "is part of our systematic restructuring of our private equity program to reposition our assets and focus on improved performance, accountability and transparency with our partners," Joseph Dear, CalPERS' chief investment officer, said in a statement.

Investment intermediary Alfred R. Villalobos, seeking to overturn a judge's freeze on his assets, said he did nothing illegal and did not harm California's largest public pension fund when he brokered investment deals that netted him more than $47 million in commissions. "Not a penny" of the commissions paid him from 2002 to 2008 came from the California Public Employees' Retirement System, Villalobos said in his first public response to a securities fraud lawsuit filed by Atty.

A state lawsuit targeting two top former officials of the California Public Employees' Retirement System could be the first in a series of state and federal actions focused on the nation's largest public pension fund. "This is not the end of this case or the end of the investigation," Atty. Gen. Jerry Brown said at a news conference Thursday. "Other things could follow." Brown said that information from his office's investigation or independent investigations could result in more lawsuits or criminal indictments from a local district attorney, the Fair Political Practices Commission or other law enforcement agencies.

So what does it take to get your foot in the door at California's giant public pension fund with its $203 billion in stocks, bonds, real estate and commodities? It has become a somewhat embarrassing question lately in Sacramento, where the California Public Employees' Retirement System is struggling to be more open about how it does business at a time when investment performance is subpar. For years, the nation's largest public pension fund basked in the luster of impressive financial returns, a reputation for investor activism and leadership in corporate governance reform, all in the name of 1.6 million state and local government workers, retirees and their families.

The California Public Employees' Retirement System on Thursday said Chief Investment Officer Mark Anson would resign to become head of a retirement management firm in England. The pension fund's board will meet Nov. 16 to decide how to fill Anson's job, a CalPERS spokesman said. Anson, 46, led CalPERS' push into alternative investments such as hedge funds.

Heavy losses in real estate holdings battered 2009 investment returns at California's giant public pension fund, although the portfolio overall rose in value for the year. The California Public Employees' Retirement System earned an 11.8% return on its portfolio as global stock markets recovered from the collapse of 2008, the fund said Tuesday. The portfolio had dived 27.1% in 2008. But the gain for 2009 was far below CalPERS' internal benchmark of 21.2%, which is based on the performance of broad indexes of investments similar to what the fund owns.