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The Board of the California Public Employees’ Retirement System (CalPERS) has strengthened ethics policies that guide how the nation’s largest public pension fund is governed.
At its December meeting, the 13-member Board tightened rules regulating its interaction with CalPERS staff concerning investment proposals and gave the Board President authority to discipline members whose actions violate policy. Board Members also will be required to attend annual training sessions detailing their responsibilities to fund participants and beneficiaries.
“By toughening our governance policies, we’re making sure that Board Members are held to the strictest standards,” said Rob Feckner, President of the CalPERS Board of Administration. “The guidelines help us keep the focus on what’s important – the quality of our investments.”
The Board’s moves followed a review of its Statement of Governance Principles that began in the fall. Among other things, the principles outline the working relationships between the Board President, Vice President, Committee Chairs, Vice Chairs, Chief Executive Officer, and CalPERS staff.
Among the policies approved:
- Board members will be required to refer communication concerning existing or potential investments to CalPERS Chief Investment Officer. The guideline also calls for Board Members to refrain from advocating a course of action concerning an investment with CalPERS staff outside a Board or Committee meeting.
- The Board of Administration President will be responsible for implementing any disciplinary action against a Board member who violates Board policies. The disciplinary action could include admonishment, censure, temporary termination of travel privileges, removal as a committee chair or vice chair, or the requirement of additional ethical or fiduciary training. The Vice President is responsible for any action against the Board President.
- The Board’s Code of Ethics as well as conflict-of-interest rules will be incorporated into the Governance Principles, creating a single document.
“Our staff must make decisions based squarely on the merits of a transaction,” said George Diehr, CalPERS Board Vice President. “We want independent, objective analysis to be the ultimate guide when it comes to CalPERS investments, and these new policies ensure that will happen.”
CalPERS is the nation’s largest public pension fund with about $200 billion in market assets. It provides retirement benefits to more than 1.6 million State, school and local public employees, retirees and their families, and health benefits for nearly 1.3 million members. For more information about CalPERS, visit www.calpers.ca.gov.
