CalPERS Chooses Prudent Management Over Politics Earning Praise From Pension Warriors


March 19, 2019

CalPERS Chooses Prudent Management Over Politics Earning Praise From Pension Warriors

During the monthly CalPERS Investment Committee meeting, the board members voted to support the staff recommendation to oppose AB 33, which would require the divestment of funds from private prisons.  

WASHINGTON, D.C. – In part driven by one of the newest board members Jason Perez, the California Public Employees’ Retirement System (CalPERS) voted to oppose pending state legislation to require the divestment of funds from private prison companies. The Institute for Pension Fund Integrity (IPFI) stands with Perez and his fellow board members, commending them for choosing prudent management of the fund over following political whims.

CalPERS yesterday chose to focus on its fiduciary responsibility to “make money” for the millions of retirees who have earned a secure retirement after dedicating their lives to public service. Beyond the estimated $175,000 in transaction costs associated with a potential divestment, the proposed divestment would negatively impact the fund’s investment strategy, exposing the fund to unnecessary risk and reducing returns.

The Institute for Pension Fund Integrity firmly believes that politically-motivated divestment does not belong in the management of our public pensions. Beyond the financial repercussion to the funds, divestment as a means of creating change is ineffective. For instance, advocates in favor of divesting from private prisons want to do so in opposition to current immigration policy. However, private companies don’t set the public policy that that has determined today’s immigration strategies. Divestment advocates are directly infusing politics into the financial management of one of the country’s largest public retirement funds. Therefore, IPFI supports the decision by CalPERS to prioritize fiduciary responsibility, and to oppose allowing politics into the management of the fund.

IPFI President Christopher Burnham reacted to the vote saying, “It’s clear that new board member Jason Perez is bringing a much-needed focus on fiduciary responsibility to CalPERS, and that the board is moving in the right direction.” He continued, “the politically motivated divestment movement across the country has proven to hurt pension performance and funding levels. This threatens all current employees, and retirees such as me.”

IPFI supports CalPERS for choosing to oppose California Assembly Bill 33 to mandate the ineffective and costly divestment from private prisons.

For more on IPFI, divestment, and other issues facing public pensions, check out our website at


The Institute for Pension Fund Integrity seeks to ensure that local, state and federal leaders are held responsible for their choices in investment, led not by political ideation and opinion but instead by fiduciary responsibility. IPFI is a non-partisan, non-profit organization based out of Arlington, Virginia, and spearheaded by former Connecticut State Treasurer Christopher B. Burnham.