CalPERS Board Action on Divestment Bill
February 16, 2017
The California Public Employees’ Retirement System (CalPERS) has been buzzing with activity this week as the Board of Administration (Board) convened for its monthly public meetings. The hot-button item on the agenda for this month’s Board meeting was the proposed action to oppose Assembly Bill 20, legislation introduced by Assembly Member Ash Kalra which would require CalPERS to liquidate all existing investments involved in building or financing the Dakota Access Pipeline.
CalPERS argues that AB 20 impedes its ability to maximize the rate of return on investments and deliver promised benefit payments. Given the fact that financial experts predict the current low-return environment will continue over the next ten years, AB 20 could put the sustainability of the fund in further jeopardy, especially as research shows a divestment such as the one proposed by AB 20 would affect approximately $4 billion in existing holdings. The final decision of the Board was to hold off on taking a formal position with the understanding that the author plans to amend the bill in the near future, hopefully taking into account all that was discussed at the meeting. As the bill may potentially impact employer contributions, CSAC will be keeping a close eye on the bill and will keep counties apprised of any major amendments.
In other CalPERS news, the agency recently announced the official launch of a new website feature which may serve as a useful tool for counties. The feature provides CalPERS’ presence and impact data searchable by State Assembly, Senate and Congressional districts. The database provides simple, transparent access to the number of contracting employers in the district as well as active and retired members, average monthly benefits, health benefit membership, real estate holdings and other economic impact data. Counties are encouraged to check out the new database and take advantage of what it has to offer.