| California pension fund's assets dropped $9 billion in February 04/13/2001 Bloomberg News SACRAMENTO, Calif. – The California Public Employees' Retirement System lost $9 billion in February, led by a $6.7 billion drop in its U.S. stocks, according to information published on its Web site.
The decline of 5.3 percent of the pension fund's assets is equivalent to $7,500 for each of the 1.2 million state and local employees the system covers.
Figures indicating whether February was one of the worst months ever for the $160 billion retirement system, the nation's largest public fund, weren't readily available, a spokesman said. The dip isn't expected to affect benefits for California state employees.
"They're alert but not alarmed," Calpers spokeswoman Pat Macht said about the system's investment staff. "They're sticking to their strategy."
That strategy, as at most other big pension funds, is to divvy up its money among various types of investments and keep that "asset allocation" stable. It helped the 69-year-old fund grow from about $32 billion in 1985 to $165 billion at the end of 2000. Calpers has 57 percent of its money in stocks and 30 percent in bonds, with the remainder in real estate and privately negotiated investments.
After the decline in its U.S. stocks, Calpers' biggest loser was international stocks, which fell $2.4 billion.
Diversification
While the fund's returns lagged that of the stock market in the late 1990s, the diversification paid off recently. The 5.3 percent drop in Calpers' assets in February was less than the 9.3 percent decline in the Wilshire 2500, a U.S. stock benchmark to which the fund compares its equity performance.
Last year, the pension fund's investments dropped 1.4 percent, compared with the Wilshire 2500's 10.3 percent dive.
The state requires a long-term rate of return of 8 percent to pay its beneficiaries. As of Dec. 31, it achieved 12.7 percent over five years.
"We're optimistic that over the long term that we'll continue to be funded for our members," Macht said.
In February, the neighboring $105 billion California State Teachers' Retirement System also fell 5.3 percent as a whole, losing $5.7 billion, according to a spokeswoman. Calpers posted its returns ahead of its investment committee meeting on Monday.
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