CalPERS hired incumbent Buck Global to provide independent valuation and certification of pension plan asset values, following an RFP launched in April.
During a board meeting on Wednesday, board member Margaret Brown said she objected to the selection methodology because "the scores were done in secret by the committee."
She said the risk and audit committee recommended the incumbent instead of recommending "another set of eyes."
Lisa Middleton, chairwoman of the risk and audit committee, replied that all committee members were informed of the methodology and offered training. The RFP did not restrict the firms that could apply to those that had not previously done work for CalPERS "in accord with CalPERS rules," she said. She added that there were six respondents to the RFP, with five approved for final scoring.
"The voting was close," Ms. Middleton said.
Matthew G. Jacobs, CalPERS' general counsel, said that the scoring could have been done in open session.
The process set up ahead of time provided that each committee scored each finalist and then sent the scores to staff, which computed the results.
Also at the board meeting, Marcie Frost, CEO of the $469.8 billion California Public Employees' Retirement System, Sacramento, reported the pension fund earned a net return of 25.5% for the one year ended March 31, 8.9% for the three years, 9.6% for the five years and 8.1% for the 10 years.
She noted that under CalPERS' funding risk mitigation policy, should the fiscal-year 2021 investment returns exceed the discount rate by 2 percentage points or more, it would trigger a reduction of the future discount rate. The fiscal year ends June 30.
She said she expects fiscal-year returns to be released as early as the July board meeting.
Separately, the board voted to oppose a state bill that would require CalPERS and the $299.8 billion California State Teachers' Retirement System, West Sacramento, to provide a school district or a city the option to choose an investment portfolio without investment vehicles issued or owned by the government of the Republic of Turkey. Staff recommended the CalPERS oppose the bill because it infringes on the board's fiduciary duty and it would impose "unreasonable operational risk and expenses" to establish a segregated trust fund.
The board took a support position on another state bill that would require CalPERS and CalSTRS to report annually the status of achieving certain objectives regarding investments with emerging and diverse money managers. If passed, the two pension systems would begin annual reporting on or before March 1, 2023, with reporting requirement ending on Jan. 1, 2028.