The state’s huge public pension fund, racked by a brutal stock market and troubled real estate investments, named a new chief executive Wednesday to cope with a 26% drop in the value of its investments over the last 18 months.
The board of the California Public Employees’ Retirement System put agency insider Anne Stausboll in charge of the nation’s largest fund. She is the current interim chief investment officer; admirers describe her as a calm and collaborative leader.
The fund known as CalPERS, whose investment decisions and policies are watched closely nationwide, manages health and pension benefits for 1.6 million California public employees, retirees and their families.
Stausboll faces the challenge of helping the fund overcome steep losses to a portfolio that has dropped in value to $182.6 billion from a high of $247.7 billion on June 30, 2007. She could not be reached Wednesday for comment.
Continued losses may force state and local governments, including school boards, to increase their employer contributions to the fund beginning in 2010 so that it can meet its pension obligations to retirees, agency staffers and board members have warned.
Stausboll, 52, a lawyer, has been a top CalPERS executive since 2004 and also worked there in the 1990s. In between, she was deputy state treasurer. She’s already gained substantial experience guiding the agency though recession-roiled financial waters.
In April, the fund veteran took over management of the portfolio after the departure of Russell Read, the former chief investment officer.
Two months later, she essentially became CalPERS’ top staffer with the resignation from state service in June of then-Chief Executive Fred Buenrostro.
CalPERS board members and watchers called Stausboll a good choice to lead the battered fund, which has lost billions of dollars in the last year on a number of investments, including equities, residential real estate and commodities.
In one currently sour deal, CalPERS stands to lose much of its $970-million majority stake in the bankrupt LandSource Communities Development, which was developing a 15,000-acre tract near Santa Clarita.
“I think she’s the right person at this time,” said California Treasurer Bill Lockyer, a member of the CalPERS board. “Pension systems throughout the country are having terrific challenges with the market turndown, and CalPERS has had its own problems with management turnover. She’s someone who really knows this system and this state well.”
CalPERS picked Stausboll from a final field of two candidates, Lockyer said. The other contender, whom he declined to name, had a strong background in employee benefits as well as investments.
The board liked Stausboll because she is a team player, Lockyer explained. That attribute, he said, was seen as important in light of the board’s often fractious relations with Buenrostro.
“CalPERS has been through some tough years, and she will bring a healing to the organization and a unification that I think is really needed,” said Richard Koppes, an attorney with law firm Jones Day, who served as CalPERS’ general counsel and worked closely with Stausboll in the 1990s.
Stausboll, who will start her new duties Jan. 12, is expected to play a major role in the hiring early next year of a new chief investment officer.
Stausboll is expected to earn $224,000 to $336,000 a year, plus a possible annual bonus of as much as 40% of her base salary, a CalPERS spokesman said.
Times staff writer Tom Petruno contributed to this report.