CalPERS CIO Ben Meng is laser-focused on investment returns. That’s the clear message he gave to the CalPERS Board earlier this year when he laid out his goals as our new chief investment officer. He said he’s evaluating every aspect of our $350 billion portfolio and looking at how each asset class fits into the overall investment strategy. And he’s aggressively pursuing our 7 percent investment rate of return by concentrating on what he calls our “comparative advantages”—the CalPERS brand; our ability to access the necessary funds when the opportunity is right and the risk is appropriate; and our focus on investing over years and decades.
In these days of volatile markets and financial uncertainty, success is never guaranteed. But if we zero in on our strengths and leverage the skills of our investment office, the odds in our favor grow significantly better.
Our fund is growing in strength and your pension benefits are safe. We’ll be here to pay what you’ve earned today, tomorrow, and long into the future. But that doesn’t mean we don’t have challenges ahead. We have to keep our focus on what’s most important right now. We still have much work to do.
The Right Tools
Our funded status—the amount of money we have on hand to pay benefits earned now and in the future—should be higher. A lower than appropriate funded status can limit our ability to take more risk when it may be appropriate. So we have to use every tool at our disposal to increase it from around 71 percent, as of the close of the last fiscal year, toward full funding—closer to 100 percent.
Ben told the CalPERS Board that a better understanding of what drives our decision-making will help us more efficiently prioritize our resources and sharpen our investment focus. In July, after he’s completed his thorough review, he’ll outline his thoughts for the board and lay out his next steps for the investment office and for the CalPERS portfolio.
Ben is ready to lead and I’m excited about the path forward.
To learn more about Ben and how he approaches his job as chief investment officer, read our Q&A with Ben Meng.