Growing the Portfolio
To hit our investment targets, we must take informed risks and be disciplined in our decision-making. Ben Meng, our new chief investment officer who joined us in January, is focused on driving the Investment Office to meet and beat our target of a 7 percent annual return. Ben wants a CalPERS Investment Office that can compete with Wall Street’s best financial institutions, and he’s structuring the Investment Office to sharpen lines of authority and accountability.
Ben spent his first six months examining our entire portfolio. He’s made clear to the Investment Office he wants everyone working toward total returns. He’s also said repeatedly he wants to increase our investments in private asset classes—but that we will be prudent and patient and invest only when the opportunity is right.
Efficient and Effective Operations
To maximize our success, we must run CalPERS in the most cost-efficient manner possible.
Last year, we improved service to our members and employers while reducing costs. This included enhanced online customer service tools like our Open Enrollment app and a new trust fund for employers to pre-fund future pension costs. For the third year in a row, we kept our workforce stable and added no new positions, instituting a new policy that allocates vacant positions based on where they’re needed most. No longer are positions automatically filled.
Our leadership team also has been on the road sharing our commitment to our members, employers, and policymakers. At every stop, we restated our opposition to divestment and voiced strong support for engaging with companies to change behavior that can harm their financial bottom line—and ours. To succeed, we need access to all investment opportunities across all asset classes. Divestment shrinks our investment universe and can greatly hinder our efforts to meet our investment targets.
We told the CalPERS story across the state, fiercely defending defined benefit plans and highlighting their economic impact on local communities large and small.
A Vote of Confidence
Our efforts to strengthen our fund have been well received. During his time in office, Governor Brown contributed an additional $6 billion to the fund. In his first budget as California’s chief executive, Governor Newsom and the Legislature appropriated an additional $3 billion, reflecting their commitment to reducing unfunded liabilities and supporting our efforts moving forward. Their vote of confidence drives us to succeed even more.
The Next Chapter
The work we’re doing has taken hold, but the next decade is critical. Pension costs are rising, and we must do all we can to contain them. Benefits are only as secure as your employer’s ability to pay them. Our goals may be ambitious, but our commitment never wavers. Working with employers, legislators, business leaders, and our members we’ll meet the challenges ahead. We’re all partners in this critically important effort to provide you with the retirement security you’ve earned.
Learn more about Marcie’s plan to secure your retirement in her latest video.
Updated 9/9/2019: Learn more about Marcie’s leadership philosophy as she discusses Courage, Perseverance, and Great Leadership in Jon Gordon’s Positive University podcast.