CalPERS' investment office is estimating that it will take two years to fully enact a new asset allocation formula, according to agenda documents to be presented to the $287.7 billion pension fund's investment committee on April 14.
The Sacramento-based California Public Employees' Retirement System's new asset allocation is scheduled to begin on July 1 and last three years. But the implementation plan shows that it will take two of those years, until July 1, 2016, to shift much of the portfolio to the new targets.
Global equity, CalPERS' largest asset class, currently at 50% of the portfolio, will actually increase initially under the interim allocation plan to 51% as of July 1. The asset class is then scheduled to decrease to 48% as of July 1, 2015, and drop to 47% as of July 1, 2016.
Private equity, now 14% of the portfolio, will be reduced to 10% as of July 1, and then increase to 11% as of July 2015 and 12% as of July 2016.
Real estate, currently 9% of the portfolio, will increase to 10% as of July 1, and then to 11% in July 2015. It is scheduled to remain at its target 11% in July 2016.
Fixed income is the only large asset class at CalPERS that is scheduled to reach its target this year on July 1. It is currently at 17% of the portfolio and will increase to 19% as of this July, remaining at that number throughout the three subsequent years.
The interim plan requires investment committee approval, but the agenda item said it is not expected to be voted on until the May 19 investment committee meeting.
The new asset allocation goes through June 2017.