CalPERS is considering changing the fund lineup for its Supplemental Income Plans to all passive funds managed by State Street Global Advisors and in-house, confirmed spokesman Joe DeAnda.
The pension and health benefits committee recommended the new lineup at its May 14 meeting. The investment committee will vote at its June 17 meeting for full approval. The SIP consists of four plans totaling $1.64 billion in assets, including the $1.1 billion 457 plan.
Under the recommendation, the total fund lineup would decrease to 16 funds from 24, including different target-date and risk-based options. All target-date funds will be managed in-house by staff of the $264.9 billion California Public Employees' Retirement System, Sacramento, and externally by SSgA, with external management costs expected to decrease to six basis points from 52 basis points.
SSgA would manage stand-alone passive options in U.S. equity, international equity, short-term bond, intermediate bond and real assets as well as a cash option and self-directed brokerage window. Active options that would be eliminated are U.S. smidcap equity value and growth options managed by The Boston Co.; international equity managed by Pyramis Global Advisors; short-term bond managed by Pacific Investment Management Co.; and active intermediate bond and TIPS options managed internally. The risk-based options would also be eliminated.
Investment consultant R.V. Kuhns assisted with the recommendations.