|California Public Employees' Retirement System|
|Agency executives||Anne Stausboll, CEO
Joseph A. Dear, CIO
The California Public Employees' Retirement System (CalPERS) is an agency in the California executive branch that "manages pension and health benefits for more than 1.6 million California public employees, retirees, and their families". In fiscal year 2007-2008, $10.88 billion was paid in retirement benefits, and in calendar year 2009 it is estimated that over $5.7 billion will be paid in health benefits.
As of December 2008, CalPERS managed the largest public pension fund in the United States with $179.2 billion in assets; however, that represented a 31% decrease from the peak value of its assets of $260.6 billion in October 2007. CalPERS is known for its shareholder activism; stocks placed on its "Focus List" may perform better than other stocks, which has given rise to the term "CalPERS effect". Outside the U.S., CalPERS has been called "a recognized global leader in the investment industry", and "one of America's most powerful shareholder bodies".
Discussion about providing for the retirement of California state employees began in 1921, but only in 1930 did California voters approve an amendment to the State Constitution to allow pensions to be paid to state workers, and only in 1931 was state law passed to establish a state worker retirement plan. In 1932, the "State Employees' Retirement System" (SERS) began operation. The California State Employees Association, established in 1931, began a close relationship with SERS that continues to this day.
In 1939, the state Legislature passed a bill that allowed local public agencies (such as cities, counties, and school districts) to participate in SERS. Initially, SERS could invest only in bonds, but in 1953 a new state law allowed SERS to invest in real estate. SERS then built a 670,000-square-foot (62,000 m2), 16-story building in Sacramento which opened in 1965; part of the building housed SERS employees, and part of the building was leased to other state agencies.
The "first major new benefit for SERS members," health insurance, began in 1962 with the passage of a law that was later amended to become the "Public Employees' Medical and Hospital Care Act". Because by 1967 SERS was contracting with 585 local public agencies for retirement benefits, its name was changed to the "Public Employees' Retirement System" (PERS). With the passage of a ballot proposition and a state law in 1966-1967, PERS was allowed to invest 25% of its portfolio in stocks; in 1984, Proposition 21 removed the 25% limitation.
State Treasurer Jesse M. Unruh was a PERS Board member in the mid-1980s. He began PERS' emphasis on corporate governance; in addition, he was instrumental in creating the Council of Institutional Investors, an organization of pension funds and other institutions that opposed "greenmail and other corporate practices that benefited only management".
In 1986, the headquarters building of PERS, now called "Lincoln Plaza North", was completed in Sacramento at a cost of $81 million. The building, which has 492,900 square feet (45,790 m2), is known for its six-story-high atrium and landscaped terraces.
In 1991, Governor Pete Wilson wished to use PERS funds to help cover a state budget deficit; however, Proposition 162, also known as the "California Pension Protection Act of 1992," gave the PERS board "the sole and exclusive fiduciary responsibility over the assets of" PERS.
To avoid confusion with public employees' retirement systems in other states, the organization's name was changed to "CalPERS" in 1992. By 1996, the CalPERS portfolio was worth $100 billion, and the number of members exceeded 1 million. In 2001-2002, CalPERS provided technical assistance for the Sarbanes-Oxley Act because it had sustained financial losses from the Enron and WorldCom bankruptcies.
In November 2005, CalPERS expanded its headquarters with the 560,000-square-foot (52,000 m2) "Lincoln Plaza East & West" buildings which cost $265 million. The architecture of the buildings, which received praise, includes an entry tower 90 feet (27 m) high in a shape reminiscent of a tree which is made of steel covered with glass. The project was awarded a Gold Leadership in Energy and Environmental Design (LEED) rating.
Current organization 
Board of Administration 
CalPERS is overseen by a 13-member Board of Administration whose members are elected, appointed, or ex officio:
- Six are elected from CalPERS members (two by all CalPERS members, one by active State members, one by active CalPERS school members, one by active CalPERS public agency members, and one by retired members of CalPERS)
- Three are appointed (two by the Governor, one by specified leaders of the Legislature)
- Four are ex officio (California State Treasurer, California State Controller, Director of the Department of Personnel Administration, and designee of the State Personnel Board)
Notable past Board members have included Caspar Weinberger (1967–1969), Jesse Unruh (1983–1987), Gray Davis (1986–1994), Matt Fong (1995–1998), Kathleen Connell (1995–2003), Phil Angelides (1999–2006), Willie Brown (2000–2005), and Steve Westly (2003–2006). As of 2011, the current Board members are Rob Feckner (President), George Diehr (Vice President), John Chiang, Richard Costigan, Dan Dunmoyer, JJ Jelincic, Henry Jones, Bill Lockyer, Priya Sara Mathur, Louis F. Moret, Tony Oliveira, and Ronald Yank.
Between 1999 and 2001, several conflicts among Board members were notable:
- In 1999, after Board member Phil Angelides (also state treasurer) criticized a statement in a report, Board chairman Charles Valdes said about Angelides "What we have here is a Greek treasurer who doesn't like Turkey, the country; who doesn't like Turks, who is trying to … drive our policy according to those ethnic hatreds". Angelides responded that he was "do[ing] what is best for the state". Valdes later apologized for the remarks.
- Board member Kathleen Connell (also state controller) sued CalPERS in January 2001 to limit its investment managers' pay. Although CalPERS argued that the higher salaries were necessary to compete for qualified investment managers and that CalPERS had the authority under Proposition 162 to issue the higher salaries, it lost the lawsuit, which "helped prompt the fund's chief investment officer to quit".
- Valdes endorsed a lawsuit against the Board's proposal to change its election procedures to require a majority vote (not simply a plurality vote) for Board seats chosen by CalPERS members.
In response to such conflicts, the Board took various measures (e.g., it adopted a "document of collegiality" in October 2001).
Other controversies have affected the Board, such as:
- In 1998, it was discovered that several Board members were "taking expense-paid trips and other gifts from people trying to do business with" CalPERS.
- Articles in 2002-2003 issues of BusinessWeek and The Wall Street Journal noted cronyism and conflicts of interest among Board members.
- A president of the Board, Sean Harrigan, was removed from his position in December 2004 amid criticism for his activism on matters of corporate governance. He claimed his removal was politically motivated.
State employees 
Approximately $332 million is budgeted in 2008-2009 for administrative functions in CalPERS, such as paying the salaries of 2,300 state employees.
The state employees perform under the direction of the chief executive officer (CEO) of CalPERS. The CEOs have been: Earl W. Chapman (1932–1956); Edward K. Coombs (acting, 1956); William E. Payne (1956–1974); Carl J. Blechinger (1975–1983); Sidney C. McCausland (1984–1986); Kenneth G. Thomason (acting or interim, 1987); Dale M. Hanson (1987–1994); Richard H. Koppes (interim, 1994); James E. Burton (1994–2002); Robert D. Walton (interim, 2002); Fred R. Buenrostro, Jr. (2002–2008); Kenneth W. Marzion (interim, 2008–2009); and Anne Stausboll (2009–Present). Besides the CEO, the executive officers of CalPERS are: Assistant Executive Officers for Administrative Services, Health Benefits, Information Technology Services, Member and Benefit Services, and Public Affairs; a General Counsel; a Chief Actuary; and a Chief Investment Officer. Under the executive officers, state employees work in 19 major branches, divisions, and offices.
Investment income gains and losses 1999-2009 
CalPERS derives its income from investments, from member contributions, and from employer contributions.
Investment Income has fluctuated from gains to losses in the last eleven years, 1999–2009, with four years of losses and seven years of gains. There was investment income gains of $17 billion in 1999, $16 billion in 2000 and five billion dollars in 2003. The stock market declines in 2001 lead to investment income losses of 12 billion in 2001 and 10 billion in 2002. Thus, the five-year period 1999 to 2003 period had a cumulative income of 16 billion dollars, or about three billion a year on an investment portfolio of over $200 billion dollars.
The next four years were a period of investment income stability; a 24 billion investment income in 2004, 22 billion in 2005, 21 billion in 2006, and 41 billion in 2007. This four-year period had a cumulative investment income of 108 billion dollars, or $27 billion a year.
With the stock market decline in 2008, during the financial crisis of 2007-2010, there were large investment income losses. There was a 12 billion dollar investment income loss in 2008 and 55 billion in 2009.
The 124 billion dollars of income in the nine-year period 1999-2007 has been reduced in half by the combined losses of 67 billion in 2008 and 2009. This totals to 57 billion dollars of investment income during this 11-year period, or about 5.1 billion a year on an investment portfolio of 261 billion in October 2007 and down to 186 billion in October 2008. This is a 2.5% return on investment over the 11-year period.
Income or loss from investments fluctuates from year to year; between 1998–99 and 2007–08, the highest income was $40.7 billion in 2006-07 and the greatest loss was $12.5 billion in 2007-08. As of October 2008, CalPERS had a total of $186.7 billion in assets invested as follows: $104.9 billion (56.2%) in equities, $41.0 billion (21.9%) in fixed income, $20.9 billion (11.2%) in real estate, $16.2 billion (8.7%) in cash equivalents, and $3.7 billion (2.0%) in inflation linked assets.
Beginning in the 1980s, and especially in the early 1990s under the pioneering leadership of CEO Dale Hanson, CalPERS has used its influence as one of the largest shareholders in the world to change the way certain things are done in business. It is especially known for its shareholder activism concerning corporate governance, in which it has been described as the most influential pension fund and as "a leader among activist institutions".
Among other examples of its shareholder activism, CalPERS has:
- Lobbied the board of General Motors (GM) "to take a more active role in monitoring the company, which may have been a factor in the GM board's ousting chairman Robert Stempel in 1992.
- Demanded in 1999 that U.S. companies in its portfolio disclose their Y2K readiness.
- Starting in 2000, "screen[ed] all its investments in emerging markets for compliance with a number of human rights, environmental and labor standards".
- As of 2002, called on companies which operate in offshore havens to repatriate to the United States.
- With other pension funds, on September 16, 2003, called upon Richard Grasso to resign from the NYSE because of an exorbitant pay package; he resigned the next day.
- In 2003, sued the NYSE and seven specialist firms over allegations that the firms' floor workers engage in practices which hurt investors. The firms "settled with the Securities and Exchange Commission in 2005 and paid more than $240 million in fines without admitting or denying guilt". The part of CalPERS' lawsuit aimed at the NYSE itself was later thrown out of court, and in 2008 the U.S. Supreme Court declined to reinstate that part of the lawsuit.
- Called for reform in executive compensation, especially Golden Parachutes, in 2004.
- In 2004, with other parties, opposed Michael Eisner as chairman of the board and CEO of The Walt Disney Company; Eisner was removed as chairman of the board and in 2005 resigned as CEO.
- In 2006, banned investment of its funds in nine companies that do business in Sudan until the government of that country halts ongoing genocide; however, that decision was described as "a largely symbolic gesture" because CalPERS "did not own a stake in any of the nine".
- Since September 2006, participated as lead plaintiff in a successful class-action lawsuit against UnitedHealth Group for options backdating. CalPERS had held "6.6 million shares of UnitedHealth stock valued at $360 million". In December 2008, a federal judge in Minnesota gave preliminary approval for UnitedHealth to pay $895 million to settle the lawsuit; furthermore, former UnitedHealth CEO William W. McGuire would pay $30 million and another former executive would pay $500,000. The decision on final approval will be made in March 2009.
- With other institutional investors, requested in 2007 that the government "set national, mandatory standards to cut greenhouse gas emissions".
CalPERS has received some criticism for its shareholder activism:
- As of 2002, there was a concern that CalPERS' activism had distracted from "its effectiveness as a corporate watchdog and its ability to provide for the 1.3 million public employees whose pensions it guarantees".
- Despite the efforts of CalPERS and others, the chief counsel of TIAA-CREF was quoted in 2003 as saying that there has been "no countrywide improvement in corporate governance".
- CalPERS votes against some companies' directors "whose sins are exceedingly small," such as "attendance gaps or minor conflicts".
- Businesses describe CalPERS as having a "pro-labor agenda", especially because of the dominance of Democrats on CalPERS' board.
- Some argue that CalPERS' actions unduly interfere with business and encourage the belief that California is "anti-business".
The Focus List and the "CalPERS effect" 
Since 1987, CalPERS has placed certain companies on a "Focus List" each year. The criteria for the Focus List have changed over time, but it currently includes companies for which CalPERS has "concerns about stock and financial underperformance, and corporate governance practices". CalPERS works with these companies to improve their corporate governance and thereby improve their financial performance. In 2008, the Focus List companies were The Cheesecake Factory; Hilb, Rogal & Hobbs Co.; Invacare; La-Z-Boy; and Standard Pacific Homes.
In 1994, Nesbitt published a study that found that companies on the Focus List trailed the S&P 500 prior to being put on the list, but outperformed the S&P 500 after being put on the list, and named this phenomenon the "CalPERS effect". The term has been used in the newsmedia. Whether a "CalPERS effect" actually exists has been studied in a number of subsequent papers, including but not limited to:
- Smith (1996) determined that shareholder wealth increased for companies that adopted changes proposed by CalPERS or made changes that resulting in reaching a settlement with CalPERS; however, shareholder wealth decreased for companies that resisted CalPERS' proposals.
- Wahal (1996) analyzed the efficacy of pension fund activism for CalPERS and eight other funds such as TIAA-CREF. Of the firms targeted by the nine funds, "only firms targeted by Calpers experience[d] a positive stock price reaction".
- Crutchley et al. (1998) discovered that CalPERS' "less visible activism" in 1995-1997 corresponded with less returns on stocks than in 1992-1994 when CalPERS' activism was more aggressive.
- Two studies published by CalPERS staff (i.e., Anson et al.) in 2003-2004 found that stocks on the CalPERS Focus List experience "positive excess stock returns of about 12% over the three months following release of the list" and "an average one-year cumulative excess return of 59.4 per cent".
- English et al. (2004) concluded that CalPERS targeting produces a statistically significant improvement in short-term returns but not necessarily in long-term returns (depending on the specific methods used to calculate long-term returns).
- Nelson (2006) claimed that his study addressed problems in the methodologies of previous studies (e.g., by controlling for the "contaminating events" of Wall Street Journal articles appearing just before or just after the dates that CalPERS released Focus List information). He found "no evidence to support the persistence of a 'CalPERS effect'" after 1993.
- Barber (2006) asserted that in his analyses "CalPERS activism yields small, but reliably positive, market reactions" in the short term. In contrast, although the long-term returns of companies "are uniformly positive and economically large" after being placed on the CalPERS Focus List, due to market volatility he could not conclude that the long-term returns were unusual. Barber's paper won a 2006 prize for best study in the area of socially responsible investing from the Haas School of Business.
- Junkin and Toth (2008), in an update of Nesbitt's 1994 study, found that the "CalPERS effect" was still present in that "the average targeted company produced excess returns of 15.7% above their respective benchmark return on a cumulative basis," but that the effect had decreased over time.
Notable investments 
- The agency both lost and gained from investments in Enron (which went bankrupt in 2001) and its affiliated companies. Its losses included common stock worth $40 million; "stock in a different portfolio, some bonds and a separate investment in New Power Co." worth $100 million; and $4 million from the liquidation of Enron's JEDI II project (i.e., CalPERS had paid $175 million for its stake but received only $171 million in return). However, as CalPERS had earned $132.5 million from the sale of its stake in Enron's JEDI I project to Enron's Chewco project, its total Enron losses were only about $11 million. Although CalPERS "was alerted by its advisers in December 2000 about the serious and potentially embarrassing conflicts inherent in one of a web of private partnerships set up by Enron's chief financial officer, Andrew S. Fastow", it later denied that it could have taken actions to prevent Enron's downfall. Nevertheless, as a result of the Enron experience, in 2002 the CalPERS board did resolve to improve accounting and auditing standards among companies in which it invests.
- In 2002, the Republican Party questioned CalPERS' investing $100 million in a firm that was co-founded by a Democratic supporter. CalPERS denied any political influence in its investment decision.
- In 2002, it was revealed that CalPERS had invested $700 million in venture capital funds of billionaire Ronald Burkle who had donated "$1.9 million to Democratic candidates and causes". Phil Angelides denied that CalPERS made its decision because of the donations.
- As of 2002, CalPERS had invested $3.5 billion in "underserved areas of California".
- In 2002, CalPERS evaluated emerging markets for "evidence of political stability, humane labor laws, a fair and functional legal system and financial transparency"; on the basis of the evaluation, CalPERS placed the Philippines on "probation" for investment. In 2004, a consultant's recommendation to remove the Philippines from the "approved" list "contributed to a 3.3% drop... in the $55-billion Manila stock market". By 2006, CalPERS had given higher ratings to the Philippines, for which its President Gloria Macapagal-Arroyo personally expressed appreciation.
- CalPERS has been criticized for being foolish to invest in collateralized debt obligations (CDOs) before the July 2007 mortgage meltdown and for not publicly addressing the issue.
- In June 2008, after Los Angeles-area property developer LandSource filed for bankruptcy protection, CalPERS was criticized for having invested $947 million in LandSource in 2007; a CalPERS spokesperson described the investment as "small" relative to CalPERS' total assets.
Member contributions 
Workers who are members of CalPERS contribute 5%-10% of their salaries for retirement benefits.
Employer contributions 
On average, schools and other public agencies contribute 12.7% of payroll for their employees' retirement benefits; however, the rates can increase if CalPERS' investments perform unfavorably and decrease if CalPERS' investments perform favorably. According to CalPERS, "The School Pool contribution rate is affected by the investment return of a given fiscal year in the second year that follows" and "Local public agency contribution rates are affected by the investment return of a given fiscal year in the third fiscal year that follows". CalPERS' earnings and losses are averaged over 15 years to prevent extreme changes in employers' contribution rates. Nevertheless, in 2008 "CalPERS warned that it might ask for more money from the state starting in July 2010 and from local-government employers starting in July 2011" if CalPERS' investments are performing poorly as of June 30, 2009.
Benefits provided to members 
CalPERS provides benefits to all state government employees and, by contract, to local agency and school employees. CalPERS administers the following categories of benefits to members:
- Retirement benefits under defined benefit plans
- Deferred compensation and other supplemental income plans
- Disability retirement and industrial disability retirement
- Death benefits
- Health benefits
- Long-term care benefits
- Member Home Loan Program
Retirement benefits under defined benefit plans 
As of June 30, 2008, CalPERS paid monthly allowances to 476,252 retirees, survivors, and beneficiaries, 86% of whom lived in California. In the year ending June 30, 2008, $10.88 billion in benefits were paid. The retirement benefits "are calculated using a member's years of service credit, age at retirement, and final compensation (average salary for a defined period of employment)," and the retirement formulas "are determined by the member's employer (State, school, or local public agency); occupation (miscellaneous (general office and others), safety, industrial, or peace officer/firefighter); and the specific provisions in the contract between CalPERS and the employer".
In addition, CalPERS administers the Legislators' Retirement System, Judges' Retirement System, and Judges' Retirement System II.
Besides CalPERS, California has a number of other public retirement systems, including:
- At least 22 counties (Alameda, Contra Costa, Fresno, Imperial, Kern, Los Angeles, Marin, Mendocino, Merced, Orange, Sacramento, San Bernardino, San Diego, San Francisco [also a city], San Joaquin, San Luis Obispo, San Mateo, Santa Barbara, Sonoma, Stanislaus, Tulare, and Ventura)
- At least 6 cities (Concord, Fresno, Los Angeles, San Diego, San Francisco [also a county], and San Jose)
- The University of California
- The California State Teachers' Retirement System (CalSTRS)
CalPERS has reciprocity agreements with many of these California public retirement systems that allow retirees with service credit and contributions in two systems to receive payments from both systems.
- In 1996, Howard Kaloogian sponsored a bill in the State Assembly to allow state employees to choose between CalPERS' defined benefit plan and a defined contribution plan; the bill failed in a State Senate committee.
- In early 2005, Governor Arnold Schwarzenegger proposed a ballot initiative to require new public employees to join a 401(k)-like plan, but dropped the proposal after opposition to a provision in the initiative to "reduce benefits for widows of officers and firefighters killed in the line of duty".
- In November 2008, the voters of the city of Pacific Grove passed an advisory measure to leave CalPERS in favor of a defined contribution plan.
Among other arguments, CalPERS claims that defined contribution plans cost more to manage than defined benefit plans and fail to provide adequate funds to retirees.
Deferred compensation and other supplemental income plans 
- The CalPERS 457 Plan serves 27,141 local public agency employees and had $598 million in assets as of October 2008.
- The Peace Officers' & Firefighters' Defined Contribution Plan, which had 40,994 participants and $297 million in assets as of October 2008, is funded by a State contribution of 2% of base pay.
- A member-funded Supplemental Contributions Program for 727 State employees had $16.5 million in assets as of October 2008.
Disability retirement and industrial disability retirement 
CalPERS offers two types of retirement benefits if a worker is disabled. In "industrial disability retirement," the "disability is due to a job-related injury or illness"; in contrast, "disability retirement" implies that the disability was not necessarily caused by employment. The specific benefits vary by employer, by the contract between CalPERS and the employer, and by the employee's occupation.
Two major controversies have affected CalPERS' disability retirement and industrial disability retirement program over the years. First, in the mid-1990s and again in the mid-2000s there were concerns about inappropriate industrial disability retirement for public safety personnel, including:
- Some non-disabled persons fraudulently claim industrial disability retirement, such as "a 'disabled' highway patrol officer riding in a rodeo." Unfortunately, "state law forbids Calpers from requiring disabled retirees who are 50 or older to submit to another medical evaluation, even if there is evidence of possible fraud".
- "A series of bills that expanded eligibility for these medical pensions - and made it easier to get them" increased costs for state and local governments.
- The list of "disabilities automatically presumed to be job-related for public-safety workers" has grown to include diseases and conditions that may or may not be caused by employment, such as lower back pain, heart disease, cancer, syphilis, HIV, and mad cow disease.
- Retirees can receive two safety disability retirements for the same condition if they are covered by two separate pension systems.
- Because California law prevents light-duty assignments in the California Highway Patrol, some officers are "forced to retire against their will."
Second, "a 1980 state law that tied public safety officers' disability benefits to the age at which they were hired" caused an age discrimination complaint with the Equal Employment Opportunity Commission (EEOC) in 1992 which eventually led to a 1995 class action lawsuit against CalPERS and other state and local agencies. In January 2003, CalPERS settled the suit by agreeing to pay $50 million in retroactive benefits and $200 million in future benefits to 1,700 officers; the settlement "was by far the largest in the EEOC's history". Furthermore, CalPERS agreed to not use an age-based formula in the future, which "basically nullifie[d]" the 1980 state law.
Death benefits 
If a CalPERS member dies before retirement, CalPERS may provide death benefits to certain beneficiaries. The benefits can include one-time payments and monthly payments, but "depend on the member's age, years of service, job classification, employer's contract with CalPERS, eligible beneficiary, date of separation from employment, and whether or not they were eligible to retire at the time of death".
Health benefits 
In 1961, the Meyer-Geddes Hospital and Medical Health Care Act was passed, which led to SERS' offering health insurance for state employees beginning in 1962. After the Health Maintenance Organization (HMO) Act of 1973, PERS began to deal with HMOs "to create more unified and standardized health care benefit rates". In 1978, the Meyer-Geddes Act was renamed the "Public Employees' Medical and Hospital Care Act".
By the early 1990s, CalPERS received national attention for its attempt at implementing "managed competition," which is the theory that health care costs "can be controlled by forcing health providers to compete with one another under government supervision". As of 1994-1995, CalPERS contracted with 24 health plans for its "over 900,000" members and was able to reduce health insurance premiums by 1% compared with 1993-1994. At the time CalPERS was "called a model for the so-called health alliances" proposed in the 1993 Clinton health care plan.
Rates continued to decline by 5.3% in 1996 and 1.4% in 1997, but rose by 2.7% in 1998 and 5.1% in 1999. CalPERS attracted national attention again in the mid-2000s, this time for health maintenance organization rate increases of 25% in 2004 and 18% in 2005. Meanwhile, the number of participating plans dropped to seven as of 2003, and "more than two dozen cities, counties and school districts" (representing 4% of membership) left CalPERS as of 2004 because of high medical insurance rates.
A 2006 study by the Government Accountability Office determined that from 1997 through 2002 the average annual growth in CalPERS premiums (6.5%) was lower than that of the Federal Employees Health Benefits Program (FEHBP, 8.5%) and of other surveyed employer-sponsored health benefit programs (7.1%); however, between 2003 and 2006-7, the average annual growth rate in CalPERS premiums (14.2%) was higher than that of FEHBP (7.3%) and of other surveyed employer-sponsored health benefit programs (10.5%). As of 2008, CalPERS eliminated copayments for preventive care visits, raised copayments for other types of office visits, and took other measures in an attempt to reduce costs.
CalPERS will provide over $5.7 billion in health benefits "nearly 1.3 million active and retired state and local government public employees and their family members" as of 2009. Therefore, it was the nation’s second largest public purchaser of health benefits, behind the FEHBP which covered "about 8 million federal employees, retirees, and their dependents". Of the enrollees, 61% are state employees and 39% are local government and school employees; 74% are working and 26% are retired.
- 68% are enrolled in health maintenance organization plans administered by Blue Shield of California and by Kaiser Permanente.
- 25% are enrolled in preferred provider organization plans called "PERS Select," "PERSCare," and "PERS Choice" which are administered by Anthem Blue Cross (the California subsidiary of WellPoint).
- 7% are enrolled in "association" plans for the California Correctional Peace Officers Association, the California Association of Highway Patrolmen, and the Peace Officers Research Association of California.
Long-term care benefits 
California's "Public Employees' Long-Term Care Act," as passed in 1990 and amended in 1996, led to CalPERS' administering a Long-Term Care Program for "all California public employees, retirees, their spouses, parents, parents-in-law, and adult siblings". Described as the "largest self-funded program of its kind", the program provides "nursing home care, residential assisted living, home health care, homemaker services and adult day care".
The program is funded by contributions and by proceeds from investments. During an economic downturn in 2002, premiums for the program rose an average of 9% to compensate for investment losses of $99 million. Another premium increase of an average of 33.6% occurred in 2007 due to "a projected $600 million shortfall in the program over the next 50 to 60 years". The causes of the deficit predicted as of 2007 were less investment income than expected, a higher volume of claims than expected, and a lower dropout rate than expected. By 2008, the program had almost 168,000 members who paid annual premiums of more than $310 million and who collectively received $76 million in benefits annually.
Member Home Loan Program 
As of December 15, 2010, the CalPERS Board of Administration approved the suspension of the CalPERS Member Home Loan Program. CalPERS is no longer accepting new applications.
Studies commissioned by CalPERS on its economic impacts 
CalPERS commissioned three studies that were released in 2007-2008 about the economic impacts of the following:
- CalPERS retirement benefits payments. Prepared by California State University, Sacramento, and released in April 2007, this study found that the direct payments of $7.7 billion in 2006 led to a total impact (including "the ripple effect of business and government revenues as spending from... benefit checks works its way through the economy") of $11.8 billion.
- CalPERS investments. Prepared by California State University, Sacramento, and released in September 2007, this study found that the direct investments of $8.3 billion in 2006 led to a total impact of $15.1 billion.
- CalPERS health care benefits payments. Prepared by Lincoln Crow Benefits Research Group and released in April 2008, this study found that the direct payments of $4.2 billion in 2006 led to a total impact of $7.6 billion.
CalPERS touted the studies as demonstrating the value of the agency with news releases such as "CalPERS and CalSTRS Pensions Power Up State and Local Economies". The studies and their use by CalPERS were criticized as follows:
- A reporter summarized the opinion of the lead author of the first study as "his study was never intended as any sort of implied commentary on the wisdom of CalPERS' policies".
- If the money that CalPERS paid in benefits were returned to taxpayers, the money would be spent and would therefore still cause "ripple effects".
- The economic impact "might be the same if a private investment firm managed the fund's portfolio".
Employee recognition program 
Among other "offerings to ensure [its] workers are happy as well as healthy," CalPERS has an onsite Montessori method child care facility, conducts employee surveys every two years, offers a training and wellness program, and administers a nationally known employee recognition program. The employee recognition program has several components:
- An informal day-to-day employee-to-employee program with a "You are the Rock" theme. The program includes a river rock that is passed around to employees who are "rock solid," rock-shaped notes with appreciative sentiments written on them, and rock-themed e-cards.
- The quarterly ACE (Achieving Communication Excellence) award, consisting of a lapel pin and an informal celebration.
- A formal annual recognition called APEX (Achieving Performance Excellence), with a crystal trophy, a cash award, and a luncheon.
- Managers are "encouraged to thank workers more often" and "are graded for the amount of ongoing feedback they gave employees".
Two CalPERS employees received 2000 National Association for Employee Recognition (NAER) Recognition Champion Awards for the employee recognition program. In addition, CalPERS itself won a 2002 Best Practices award from NAER. The employee recognition program was reported to contribute to high employee satisfaction and a low employee turnover rate at CalPERS.
The legal authority for the activities of CalPERS can be found in the constitution, laws, and regulations of the state of California, including:
- California Constitution, Article XVI, Section 17, under which (as amended by Proposition 162) "the retirement board of a public pension or retirement system shall have plenary authority and fiduciary responsibility for investment of moneys and administration of the system".
- California Government Code, Title 2, Division 5, Parts 3-8 (i.e., Sections 20000-22970.89). Among other parts, Part 3 covers the administration of the retirement system including membership, contributions, and benefits; and Part 5 covers the Public Employees' Medical and Hospital Care Act on health benefits.
- California Code of Regulations, Title 2, Division 1, Chapter 2, Sections 550-559.554.
See also 
- CalPERS. Facts at a glance: general. January 2009. Retrieved December 24, 2008.
- CalPERS. Facts at a glance: retirement & membership. December 2008. Retrieved December 17, 2008.
- CalPERS. Facts at a glance: health. January 2009. Retrieved December 27, 2008.
- Said, Carolyn. State public worker pension fund takes big hit. San Francisco Chronicle, December 8, 2008. Retrieved December 18, 2008.
- Sidel, Robin. "Calpers effect" may give lift to underperforming stocks. Wall Street Journal, April 20, 2004.
- Republic of the Philippines, Office of the Press Secretary. PGMA welcomes CalPERS upgrade of RP investment rating. February 3, 2006. Retrieved December 26, 2008.
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