Headlines

CalPERS Hits Back at “Sensationalist” Media Report

Local paper incites anger from giant pension fund.

(January 17, 2013) -- The largest US public sector pension fund has published an open letter slamming local news reports for sensationalising its actions.

The California Public Employees' Retirement System (CalPERS) said a story that appears on the front page of today's Sacramento Bee "unfairly sensationalizes an allowable human resource practice".

The paper's story reports a number of secondary payments that were made to existing staff at the $252.8 billion pension fund, over and above their normal wages. These payments were received in return for extra work done to update glitches with the pension's computer and information technology systems.

Several local and regional employment lawyers were quoted in the paper's story, saying the practice "circumvents the state's intent to set fixed wages for salaried management jobs" and "could expose CalPERS to lawsuits".

CalPERS was given the right to respond to the story and was quoted as saying that the practice was legal and fair.

However, Katie Hagen, chief of the CalPERS human resources division, used the open letter to accuse the paper of exaggeration: "In spite of CalPERS urging the Sacramento Bee to write a fair and complete story, the Bee rushed to print a sensationalized story rather than to collect a full and complete understanding of this issue."

The letter was published on the CalPERS' website before close of play in California yesterday. This morning at 12:00am PST the story appeared on the first page of the paper's website. It remained there at the time of going to print.

In August, the giant pension fund hit back at the media over a story about its 2011 investment performance. A post on the CalPERS' website lacerated an op-ed authored by Thomas Elias and published in the Ventura County Star, calling it inaccurate. The op-ed urged pension reform and blasted CalPERS' "lousy" 2011 investment performance of 1%, saying that the weak return could push Californian cities into bankruptcy.

To read the Sacramento Bee Story, click here. To read the CalPERS open letter, click here.

| epfeuti@assetinternational.com | (44) 207 397 3816