Copyright© 2007 by School Services of California, Inc.

                                      Volume 20                   For Publication Date: June 22, 2007             No. 14

CalPERS Votes to Remove Restrictions 

As it seeks to boost profits, the Public Employees’ Retirement System (PERS), the largest public pension fund, removes its plans to limit investments in unstable countries. Some see this new direction by the agency a surprise move in light of the recent criticism on previous investments in countries like Iran. The California Legislature wants to prohibit PERS from making such a move. Under AB 221 (Anderson, R-La Mesa), the state’s retirement funds would be banned from investing in foreign companies that do defense-related business in Iran.

At its regularly scheduled board meeting, PERS trustees voted to delay researchers moving forward in ranking countries with unstable financial markets and geopolitical dangers. According to Board President Rob Feckner, since the pension fund has lost millions in potential profits, the board will now allow outside money managers to make those investment decisions.   

According to pension board consultants, the $248 billion PERS fund has lost close to $200 million in potential profits because it has not invested in countries like Russia and China that have emerging markets.     

Last year, Governor Schwarzenegger signed legislation to end state investment in Sudan in a protest to the genocidal violence in its Darfur region. 

—Jamillah Moore, Ed.D.