CalPERS is adopting the FTSE All-World (ex-U.S.) index as the benchmark for its $30 billion-plus in international equities, a big win for FTSEs efforts to penetrate the U.S. pension market. Currently, the $170 billion California Public Employees Retirement System, Sacramento, uses the MSCI All Country World index (ex-U.S.) as the benchmark for its active international equity portfolios, while using a custom Financial Times/International Finance Corp. benchmark for its passive portfolio.
The move to a consolidated benchmark was signaled at CalPERS October 1999 investment committee meeting, when the staff recommended switching active managers to the passive benchmark. Staff was delegated authority to make the change. Currently, 75% of assets are passive and 25% are active, but the active portion is expected to increase under more flexible investment guidelines previously adopted by the system.