CalPERS committee approves $74.4 million for multi‑year data and technology modernization as board adopts 2026–27 budget

The California Public Employees Retirement System’s Finance & Administration Committee approved a phased, multi‑year investment in modernizing the system’s investment data and technology platforms and adopted the board’s proposed 2026–27 operating budget.

Michelle Nicks, a CalPERS team member, outlined agenda items and introduced the data and technology update before staff presented details of the initiative and its costs. Rob Patterson and Jennifer Hafner described four linked projects: a total‑fund and capital markets platform, a private markets platform, a centralized data platform and developed applications if off‑the‑shelf tools fall short.

"Our current investment systems… were implemented over the last 10 to 20 years… these legacy systems lack integration. It results in manual processing and increased operational risk," Jennifer Hafner said, urging modernization to reduce operational risk and position CalPERS to leverage new technologies including AI.

Liz Drummond, business lead for project one, described a phased go‑live schedule that would migrate affiliate funds and private markets data in early phases and bring full total‑fund risk and analytics online by March 2028. She said staff are assessing whether the timeline for total‑fund risk capabilities could be accelerated by roughly six months, if commercially feasible.

Project costs have been refined since initial estimates. Staff reported an updated overall estimate of $181.9 million for the four‑project program and requested approval of $74.4 million for fiscal year 2026–27, including a 5% contingency. The committee approved action item 5A to proceed with the initiative by voice vote.

The modernization funding request was part of the broader 2026–27 budget proposal presented by budget chief Will Schoffs. The proposed operating budget totals $934.2 million, a 5.9% increase over the current year, and includes $678.9 million in administrative operating costs and $224.5 million in investment operating costs. Staff reported that $36.4 million of the investment operating increase is attributable to the data and technology initiative. CalPERS also projects external investment management fees of approximately $2.2 billion for 2026–27.

Board members questioned the growth in external management fees and whether members and employers are receiving commensurate value. Will Schoffs said performance is reported net of fees and that private asset investments have generated substantial net returns in recent years. Public commenters urged the board to reduce reliance on external managers and to scrutinize fees.

The committee moved and approved the overall 2026–27 budget (action item 5B) by voice vote. Staff said they will continue to refine project estimates and report updates to the board.

What’s next: CalPERS staff will continue implementation planning, vendor onboarding and regular reporting to the board; the project team will return with updates on potential schedule acceleration and refined cost numbers.