“When we released our special review report on placement agents in the spring, it was a clear reminder that the stewards of CalPERS have to protect a sacred trust, one that should never be allowed to be compromised,” said Rob Feckner, President of the CalPERS Board. “We dedicated ourselves to pursuing all of the appropriate policy changes to strengthen transparency, accountability and integrity of this fund. Today, those changes are in place.”
The CalPERS Board adopted six Principles for Effective Public Pension Fund Governance that reflect each Board Member’s commitment to be effective and capable fiduciaries; ethical leaders; open and accountable to CalPERS stakeholders; risk intelligent and insightful in their decisions; focused on a long-term view for the needs of our members, retirees and their families; and committed to continuous learning, while being flexible for changing environmental, political and economic conditions. The governance reforms also call for:
• Each Board Member to sign a statement acknowledging their fiduciary responsibilities in conjunction with fiduciary training and self-assessment processes.
• An independent third party to assess Board performance once every two years.
• New roles and responsibilities for the Board President, Vice President, Committee Chairs and Vice-Chairs.
• A new Powers Reserved structure for the Board and its committees that outlines responsible parties for approvals, standards of conduct, strategy, policy, and performance.
• Certification of a “no undue influence” document to be signed by all senior executives and investment officers.
• Adoption of a new confidentiality policy that will assist in guiding Board conduct.
“We are confident that these new reforms will help ensure the public’s trust in our decisions, actions, and operations,” said George Diehr, Vice President of the CalPERS Board.
The CalPERS Board will also consolidate and realign its committee functions by combining parts of its current Benefits and Program Administration Committee with its Health Committee to form the Pension and Health Benefit Committee. It will also reconfigure the fund’s Finance and Risk Management to improve independent reassurance by consolidating all reassurance activities into a revised Risk and Audit Committee.
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