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CalMATTERS: In uncertain times, the mission of California’s pension funds is vital

By Yvonne Walker

July 11, 2020

No one needs to be reminded that these are uncertain times.

The course of the COVID-19 pandemic and its long-term effect on the economy is unknown. Financial markets are unpredictable. No one knows when people will again be able to gather, travel, work and spend as freely as they had before.

In times like these, the mission of CalPERS is more vital than ever. It must provide for its 2 million workers and retirees the certainty of a secure retirement income.

CalPERS remains positioned to provide that certainty.

It has taken steps over the last couple of years to prepare for an economic downturn – one that we all knew inevitably would come.

Having learned a hard lesson from the 2008 financial crisis, CalPERS increased the fund’s liquidity to ensure that it can continue to pay benefits without having to sell assets in a depressed market. It increased the percentage of the fund managed by in-house investment professionals, saving about $115 million annually in fees. And it is in the process of restructuring its portfolio to take full advantage of its comparative advantages as an investor.

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