Calpers
A new independent report commissioned by the Retired Public Employees Association of California is raising serious questions about how the ~$630 billion California Public Employees’ Retirement System (CalPERS) has been managed. NBC News reported on May 22 that the review was led by forensic investigator and former SEC attorney Edward Siedle after repeated efforts to secure a state audit reportedly failed.
Key findings from the report:
• CalPERS allegedly ranked in the bottom 15% of roughly 230 U.S. public pension funds over both 5- and 10-year periods.
• About 9% of assets were reportedly tied up in “zombie” private equity funds — aging investments still charging fees while struggling to return capital.
• The report also questioned fee transparency, governance, consultant conflicts, and executive compensation, noting multiple executives reportedly earned more than $1 million annually despite long-term underperformance.
• Siedle argued that public pensions should be among the most transparent financial institutions in the country, and that resistance to oversight is itself a warning sign.
CalPERS strongly disputes the report. CEO Marcie Frost called it “an opinion piece full of baseless assertions” and pointed to stronger recent performance:
• Top 5% among large U.S. public pension funds over the last 2 years
• Top 15% over 3 years
• Improved private equity results following strategy changes
• A reported 35% reduction in investment fees since 2024
The broader issue goes beyond one report. Public pension systems across the U.S. are under pressure from rising liabilities, dependence on private markets, illiquid investments, and growing concerns around transparency and governance. Private equity can boost returns, but it also brings higher fees, harder-to-value assets, and long lockup periods — risks that become more visible during economic slowdowns or higher-rate environments.
Whether you agree with the report or not, one thing is clear: when taxpayer-backed pension systems manage hundreds of billions of dollars for millions of retirees, scrutiny and independent oversight matter.