(August 16, 2012) — The California Public Employees’ Retirement System (CalPERS) Board of Administration has approved a new five-year strategic plan to guide the nation’s largest public pension fund through what promises to be a trying stretch.
“This is an important milestone for our organization and is a testament to the collaboration, innovation and thoughtful thinking of our Board, staff and stakeholders,” said Rob Feckner, president of the board, in a statement.
The plan outlines three primary goals for the 2012-through-2017 period: improve long-term pension and health benefit sustainability; cultivate a high-performing, risk-intelligent and innovative organization; and, engage in state and national policy development to enhance the long-term sustainability and effectiveness of the programs.
“The initiatives in this strategic plan provide a high-level frame of reference to guide daily activities and anticipate risks and opportunities, and help CalPERS articulate what is important to us and our members,” said CEO Anne Stausboll in a statement. “Working closely with our stakeholders we will review our plan annually so it remains relevant through the years ahead.”
CalPERS has been unusual in its willingness to engage with critics who have been railing against weak short-term returns and calling for reform. Feckner authored an op-ed in the Sacramento Bee, titled “Media is wrongly hyping pensions as a cause of city bankruptcies,” in which he offered “a little perspective” from the back end of the pension system. “CalPERS is a long-term investor,” Feckner wrote. “This concept is either ignored or misinterpreted by many on a regular basis, and is the greatest source of misunderstanding and misinformation about pensions. As a long-term investor, we fully expect a range of possible returns every year…If the media and our critics insist on looking at returns on a single-year basis they should tell taxpayers the full story – we posted gains not just in excess, but in significant excess of our goal of 7.5 percent 14 times in the past 20 years.”
The $237 billion fund’s new strategic plan suggests that CalPERS will continue its active participation in the growing discourse surrounding public pensions. Indeed, two of its stated objectives are to “clarify and communicate CalPERS’ perspective on pension, health and financial markets,” and “provide education and engagement opportunities to shape policy agenda and expand impact.” It seems Feckner has his op-ed pen at the ready.