September 16, 2013
External Affairs Branch
Robert Udall Glazier, Deputy Executive Officer
Brad Pacheco, Chief, Office of Public Affairs
Contact: Joe DeAnda, Information Officer
CalPERS Adopts Investment Beliefs to Guide Investments and Align Interests Across the Portfolio
Role of liabilities, commitment to governance among the set of ten
Sacramento, CA - The California Public Employees' Retirement System (CalPERS) Board of Administration adopted a set of 10 Investment Beliefs that will provide a basis for strategic management of the investment portfolio, inform organizational priorities and ensure alignment between the Investment Office and CalPERS staff.
Each Investment Belief also includes more detailed sub-beliefs that are actionable statements providing insight as to how the Investment Beliefs will be implemented.
"Having an overarching set of Investment Beliefs to guide decision-making throughout the organization will be a tremendous asset as we work toward our strategic goals," said Henry Jones, CalPERS Investment Committee Chair. "The decision-making process was thoughtful and thorough, and leaves us with a firm sense of what is most important."
Notable beliefs state that:
- Liabilities must influence the asset structure
- A long time investment horizon is a responsibility and an advantage
- Long-term value creation requires effective management of three forms of capital: financial, physical and human
The adoption of CalPERS Investment Beliefs marks another step in the System's work to integrate its assets and liabilities, and ensure CalPERS is sustainable over multiple generations.
"These beliefs are another important step in the recovery of CalPERS, providing a clear direction and philosophy for investment decisions," said Joe Dear, CalPERS Chief Investment Officer. "They also will be integrated into the culture of the Investment Office and help maintain continuity at all levels of staff."
The development of the Investment Beliefs began in 2012 with participation from the CalPERS Board of Administration, CalPERS staff and investment consultants. The process started with detailed interviews with Board members and staff to identify themes and gather data. A series of public workshops were then conducted throughout 2013 to work through unsettled issues, as well as to include input from stakeholders and members of the public.
The Investment Committee also conducted a first reading of the policy that will provide context for how the Investment Beliefs should be used. The policy makes clear that the Investment Beliefs are a framework for making decisions and not a checklist to be applied to each decision. It also requires periodic review of the Investment Beliefs. A final version of the policy will be adopted at the October Investment Committee meeting.
View the complete list of Investment Beliefs (PDF, 173 KB).
CalPERS is the largest public pension fund in the U.S., with more than $265 billion in assets. We administer health and retirement benefits on behalf of 3,064 public school, local agency and State employers. Our members number more than 1.6 million in our retirement system and more than 1.3 million in our health plans.