CalPERS discusses investment risks amid US market disruptions and reiterates pension security

The California Public Employees Retirement System (CalPERS) held a meeting on April 15, 2025, where CEO discussions focused on recent market disruptions and their implications for the pension fund. CEO President Taylor addressed the impact of U.S. government policy decisions on global financial markets, emphasizing that while CalPERS is a long-term investor, the recent volatility has raised concerns.

Taylor reassured CalPERS retirees and beneficiaries that their pensions remain secure, stating, "Your pension is safe." He highlighted the fund's liquidity, which ensures monthly payments will continue despite market fluctuations. However, he noted the potential long-term effects of current economic conditions, particularly as the fiscal year approaches its end on June 30, 2025. CalPERS aims for a minimum investment return of 6.8%, which is crucial for setting contribution rates for local governments and schools.

The CEO reported a significant decline in market value, with an estimated drop of $26 billion within a week following the announcement of tariffs. He expressed concerns that these tariffs could negatively impact GDP and increase prices, raising the risk of a recession. Despite these challenges, Taylor emphasized the importance of a diversified investment portfolio, which is designed to withstand various financial challenges.

In addition to market discussions, Taylor briefly mentioned an agenda item regarding CalPERS' efforts in diversity, equity, and inclusion. He indicated that the team would present progress on these initiatives, aimed at enhancing the organization and meeting members' expectations for secure retirement and quality healthcare.

Overall, the meeting underscored CalPERS' commitment to navigating current economic uncertainties while maintaining a focus on long-term investment strategies and organizational goals.