The California Public Employees’ Retirement System (CalPERS), the biggest pension system in the country, reported some good news recently, when officials announced a stellar 11.2% return rate percent, a stark contrast to less than stellar returns from the past two years, when CalPERS recorded returns of .61% and 2.4%.
The good news comes at a time when pension funds all across the country are being pressured to stray away from their primary mission, securing the retirement of those retirees who paid into the funds, and become an instrument to advance a certain ideology. CalPERS has been targeted by bills such as Assembly Bill (AB) 20, which originally mandated the divestment of funds linked to the Dakota Access Pipeline (DAPL), but was amended in a way that merely pressure the fund to do so. Protect our Pensions has opposed this bill, sending letters to both the Senate and Assembly asking them to vote “no” on the bill.
Protect our Pensions is far from the only voice on this issue. According to the Sacramento Bee, California’s labor, public safety, and law enforcement communities have all issued calls for CalPERS, along with the California State Teachers’ Retirement System (CalSTRS), to focus on their primary duties – maximizing investment returns – rather than engage in dubious divestment exercises. Steve Crouch, of the International Union of Operating Engineers, put it bluntly:
It’s time for CalPERS to reevaluate their investment strategies and focus more on improving their investment returns and less on ‘socially responsible’ investments.
Crouch’s sentiments were echoed by Police Lt. Jim Auck, Treasurer of the Corona Police Officers Association, who highlighted the fact that pension shortfalls prevented his department from hiring more officers:
We cannot afford to lose funding for law enforcement officers in exchange for a socially responsible investment policy… The CalPERS board has a fiduciary responsibility to the membership to deliver the best returns possible.
As CalPERS prepares to head into the new fiscal year on a high note, the fund and its employees should focus on their core mission: securing the financial future of retirees and their families.