Calpers, the California Public Employees Retirement System, manages about as much money the gross domestic product of Israel – around $200 billion at the latest count.
The long term financial security of 1.6 million people, from firefighters to janitors and judges, depends on Calpers getting it right.
America’s biggest pension fund, Calpers built up a gold plated reputation over the decades, founded on steady returns combined with a willingness to pioneer new investments and police public companies as an activist shareholder.
But in an embarrassing reversal of fortune, it said this month it was probing fees paid by outside money managers to win its business, expanding a review of “pay-to-play” schemes at public retirement systems that has spread across the nation.
Corruption, if it happened, is bad enough. But Reuters has been investigating whether pensioners and state workers in California should be equally worried about the fund’s perfectly legal activities.