Calpers investments surpass prior record high

SAN FRANCISCO, April 26 Fri Apr 26, 2013 7:33pm EDT

SAN FRANCISCO, April 26 (Reuters) - The value of investments held by the California Public Employees' Retirement System rose to $261.7 billion as of Friday, putting it above its previous high in 2007 before the financial crises and recession sent it tumbling.

The assets sank to a recession low value of $164.9 billion in February 2009 from a record of $260.5 billion in October 2007, said Joe DeAnda, a spokesman for the fund, which is best known as Calpers.

DeAnda attributed the recovery primarily to Calpers' stock portfolio. The fund has about half of its money in stocks. But "just about everything has improved," DeAnda said.

Since 2009, officials at Calpers, the biggest U.S. public pension fund have been working to put its finances on stronger footing, including by adopting a more conservative annual return target of 7.5 percent last year, down from a previous and longstanding 7.75 percent.

Lowering the rate has the effect of requiring public agencies, including local governments, using Calpers to manage pension accounts to increase payments to it.

Additionally, the fund's board earlier this month approved accounting changes that will require state agencies, cities and counties to pay rate increases to Calpers of up 50 percent.

The new policy will phase in increases. While they may strain government employer's finances, they will fully fund Calpers' obligations in 30 years.

Calpers is about 70 percent funded. The retirement system estimates its unfunded liability was about $100 billion at the end of June 2012.