(updated with correction)
California Public Employees' Retirement System, Sacramento, returned 16.19% on investments for the year ended Dec. 31, its best performance in 11 years. The results beat CalPERS' custom benchmark of 14.82%.
The fund saw an annualized 9.99% return for the three-year period ended Dec. 31, also topping its benchmark of 9.84%., according to performance statistics released Monday at a CalPERS retreat in Monterey, Calif.
For the five years the fund returned an annualized 10.86%, vs. its benchmark of 12.5% and for 10 years, its return was 6.83%, compared with the benchmark of 7.7%, reflecting losses suffered in the financial crisis.
Board President Rob Feckner said the recent results are evidence the retirement system can produce over the long term its assumed return of 7.5% a year. Critics have contended the system's return assumption is too high and have called for CalPERS to lower it. The CalPERS investment committee is expected to determine the assumed rate of return for the next thee years at its February meeting.
In specific asset classes for the most recent year, public equity returned 25.61%, 88 basis points better than its custom equity index while fixed income returned -4%, 170 basis points over its benchmark. In alternatives, absolute-return strategies returned 9.22%, 395 basis points above the benchmark, while private equity returned 19.09%, or 505 basis points below its custom benchmark and real estate returned 11.69%, 43 basis points below its benchmark.
Private equity and real estate returns are for the year ended Sept. 30.