CalPERS board members will consider forcing the pension system’s next chief investment officer to sell personal stocks before taking the job, according to a proposal posted to the board’s website.

The proposal follows the abrupt exit last month of former Chief Investment Officer Ben Meng, who was the subject of an anonymous ethics complaint after approving a $1 billion CalPERS investment with a firm in which he held stock.

A CalPERS committee is scheduled to weigh the new proposal at a Sept. 16 meeting. The proposal would require Meng’s replacement to either sell personal stocks or put them in a blind trust that would be managed independently.

The change would “significantly diminish any perceived or real conflicts of interests originating from such assets,” according to a memo on the proposal from CalPERS Human Resources Division Chief Michelle Tucker.

“The board was looking for ways to address potential conflicts of interest and we feel this is a good starting point for discussion,” CalPERS spokesman Wayne Davis said.

CalPERS announced Meng’s resignation in a late-night press release on Aug. 5.

In March, he approved a $1 billion investment with a private equity fund controlled by Blackstone Group Inc., a New York financial firm. His conflict-of-interest disclosure statements showed he held as much as $100,000 in Blackstone stock.

His exit leaves the CalPERS board and CEO Marcie Frost searching for someone to replace him. Meng was the state’s highest-paid employee in 2019 with $1.5 million in compensation but made less than people who hold similar roles in the private sector.

The top jobs at CalPERS have a political component, with decisions being closely scrutinized by critics, retiree groups and the financial press. Meng, a U.S. citizen who was born in China, faced allegations from a Republican congressman that he had a “cozy” relationship with Beijing and was steering investments to the country.

The fund, which as of Friday was valued at $415 billion, earned 4.7% on its investments for the fiscal year that ended June 30, falling short of a 7% target.

This story was originally published September 8, 2020 at 5:00 AM.