Value of CalPERS’ Assets Down 7.2%
The California Public Employees’ Retirement System, the nation’s largest public pension fund, said Thursday that the market value of its assets fell 7.2%, to $156 billion, in the fiscal year ended June 30.
The fund blamed the decline on the plunge in stock prices worldwide. It said its U.S. bond and real estate investment returns were positive for the year.
CalPERS said its U.S. stock portfolio declined 13.9% in the 12 months. That was a better performance than the 15.4% drop during the period in the Wilshire 2500 stock index, which tracks the 2,500 largest U.S. stocks.
In the same period, the blue-chip Standard & Poor’s 500 index lost 14.8%.
“Clearly, this . . . interjects a sense of reality into what has been a fairy-tale environment in the equity market,” said Daniel Szente, CalPERS’ chief investment officer in Sacramento. “Equity market returns in particular have been abnormally high, and a return to more normal conditions should be expected,” he said.
CalPERS said the decline in the fund’s value “does not affect [the system’s] ability to pay benefits.” CalPERS provides retirement and health benefits to more than 1.2 million state and local public employees and their families.
The fund’s average annualized return over the last three years is 5%, and over the last five years is 10.7%.
“We remain in good shape and well ahead of where we need to be in terms of growth of assets and long-term returns,” Szente said.
CalPERS assets stood at $100 billion five years ago.
Among individual investment sectors, CalPERS said its international stock portfolio fell 20.1% in the fiscal year, compared with a 22% loss for its benchmark.
The fund’s real estate investments earned a 14.4% return for the year, and its U.S. bond portfolio earned 12.6%, CalPERS said.
Private-equity investments posted an 11% loss for the year.
Publicly traded stocks represented about 59% of CalPERS’ assets as of June 30. Fixed-income securities were 28% of assets, real estate made up 8% and private equity, 5%.
