How have pension funds handled the last few months?

We’re told markets are in turmoil. But they’re also just an inch away at all-time highs. Retail investors are racking up triple-digit returns, and seem to be making an attempt at necromancy with the bankrupt husk of Hertz, the rental car market’s onetime global leader.

So we called Marcie Frost. She oversees a team of 2,800 professionals as CEO of CalPERS, the agency charged with managing roughly $400 Billion on behalf of California’s public employees, retirees, and their families.

We’ve highlighted a few of her choice observations below, but you should really listen to the whole thing.

One quick programming note before you do: we’ve partnered with Columbia University’s Center on Sustainable Investment and Beyond Alpha research on a study of the investment industry’s role in meeting the UN Sustainable Development Goals. If you are interested in participating, please fill out this form.

On COVID-related volatility: “Our liquidity position was much better in this pandemic than it was in ’08-09. So we didn’t have to sell assets to pay benefits. We didn’t have to sell assets to make capital calls. And I think even more importantly, we had liquidity that we could actually take advantage of the market dislocation with opportunities, and we were able to do that. So we have to think long-term, we plan on being here for decades, paying benefits out over a member’s, lifetime and their beneficiaries’ lifetimes.” (11:16)

On operational changes stemming from COVID: “It is likely that, so we will have half of our workforce working remotely from this point on. We don’t see a need to carry the cost of having, you know, an office or a workstation or having two sets the desktop computer. If you all having a docking station, there’ll be times that we’ll need people to come into the office. We’ll have hoteling available for those individuals then.” (15:00)

On meeting a 7% return target: “it’s a really strange group of expectations that we have, if you will, that it’s expected to get the 7% return, we’re expected to pay out 24 billion. And while we do that, we want to find opportunities where we can do well while we can also do good for the environment and for governance issues.” (21:00)

On recent pressure from Congress to divest CalPERS’ Chinese investments: “it wasn’t any different than any other requests that we get from any other entity. It just happened to be a member of Congress. It happened to be on a television channel and it was done in a really horrific way.” (30:14)

On her career path: “the traditional way is you graduate high school, you go to college, you start working, and then maybe you go in for an advanced degree. I really didn’t have the means at the time I, I grew up in a household that didn’t have many financial options. I started working right out of high school. I started a family when I was quite young and those were my priorities. And I was able to work my way through these systems, if you will. I started as a typist in October of 1985 and worked my way through until starting here at CalPERS in October of 2016.” (41:38)

A computer-generated transcript of our full conversation is available by clicking here.

As is tradition, we also took questions from listeners at the end of the show. If you have a question, a comment, or just a wry observation, please write us at

This week, we answered the following:

  • A leaked British Petroleum brand document made headlines recently for asking how the company can be more like Greta Thunberg. How can they? 
  • Private equity funds are often proud to mention that their investors include police pension funds. Should we expect that to change in the future? 
  • What adjective describes your preferred form of capitalism (I.e, conscious capitalism, Subaru capitalism, Camus capitalism…)

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