Has CalPERS set itself up for trouble? The fund's decision on Monday to embrace public-private infrastucture investments has been a hot topic among pension experts, particularly its eleventh hour agreement with the state engineers' union to avoid putting money into projects that could impact public employee jobs.
In an insightful blog entry analyzing CalPERS policy, Susan Mangiero, head of Pension Governance LLC, wonders, "if CalPERS and infrastructure fund managers will soon find themselves at loggerheads."
Mangerio, a charter member of the State Worker's BrainBank of go-to experts, outlines several concerns in the blog, including how the fund will determine whether so-called PPP investments displace public employee jobs, the cost of making those determinations and whether the policy sets up conflict between the interests of the state engineers and all CalPERS members. You can read her analysis here.
It's a complex topic, but one that deserves your attention if you contribute to the fund. Many experts believe that CalPERS and other benefit administrators are moving toward these kinds of investments to further diversify their portfolios.
If you want to get up to speed on CalPERS' new infrastructure investment class and how it reached a compromise with he 13,000-member Professional Engineers in California Government, click here for yesterday's State Worker entry. You can read CalPERS PPP policy here.