The State Worker

CalPERS beats earnings target for second consecutive year

For the second year in a row, California’s main public pension fund beat its investment return forecast.

The California Public Employees’ Retirement System reported Thursday that it had an 8.6 percent return on investments for the fiscal year that ended June 30 — exceeding its expectation of a 7 percent return.

“While we’ve seen some expected volatility in the markets, our diversified, global portfolio has allowed us to exceed our expected rate of return of 7 percent,” Ted Eliopolous, CalPERS’ chief investment officer, said in a video. “While we’re pleased with the returns, we’re always focused on the long-term bigger picture.”

Last year’s strong returns were driven by solid performance in the stock market, as well as a 16.1 percent gain on private equity investments and 8 percent on real assets, such as real estate and infrastructure.

CalPERS, which controls about $357 billion in assets, now has about 71 percent of the funds it would need if it had to pay all of the benefits it owes to retirees and public workers — up 3 percent from last year.

Dave Low, executive director of California School Employees Association, one of the state’s largest public employee unions, praised the fund’s performance.

“While it’s important not to focus on one-year returns, these returns continue the long-term trend of CalPERS performing above or near its long-term discount rates and once again defying the sky-is-falling predictions of system critics,” Low said in a statement.