CalPERS CIO Russell Read today floated a proposal that would make the retirement system's investment products available to plan participants, California residents and eventually to a national client base. Mr. Read said the $228.7 billion California Public Employees' Retirement System, Sacramento, will spend the next three years figuring out how to offer unitized products to potential investors.
He said two types of investment products would be developed: core funds that invest in broad asset classes, including equities, bonds and REIT strategies; and goal-oriented funds including the entire CalPERS main fund or its subsets, asset allocation, target-date, socially responsible and inflation-protection funds. Mr. Read said the goal-oriented funds would rely on CalPERS' strengths in asset allocation and its access to top money managers.
Mr. Read said the unitization program is first being expanded to CalPERS' $614 million 457 plan. An overhaul of 457 plan fund offerings will be made in June. Beyond that, CalPERS officials said they will proceed slowly, since an array of tax, legal and market questions in developing a broad strategy need to be addressed.
CalPERS board members reacted cautiously to the idea. "We need to take each piece one step at a time," said board member Marjorie Berte.
CalPERS CEO Fred Buenrostro said he plans to bring a fleshed-out proposal to the board's summer offsite meeting.