CalPERS Earns 19.5 Percent for the Year; Fund Grows More Than $23 Billion.

SACRAMENTO, Calif.--(BUSINESS WIRE)--Aug. 6, 1998--The California Public Employees' Retirement System (CalPERS) earned a 19.5 percent return on its investments for the 12 months ended June 30, 1998, according to a report released by the System.

The fund's total assets stood at more than $143 billion at the end of the fiscal year -- $23 billion higher than one year ago.

CalPERS performance ranks the pension fund 25th (top quartile) versus the Trust Universe Comparison Service (TUCS) peer group of public pension funds with assets over one billion. It also marks the fourth year of double-digit returns since CalPERS Board of Administration's decision to invest more of its assets into the equity markets.

Today, 72.7 percent of CalPERS portfolio is invested in equities and real estate, and 27.3 percent in fixed income.

"Our members can be assured that their retirement security rests on a strong financial foundation," said Charles P. Valdes, Chair of CalPERS Investment Committee. "Asound long-term investment strategy has in large part helped us to build a fund that is well prepared to meet our benefit obligations into the 21st century."

The System's partnership and private equity investments returned nearly 36 percent, more than double the 15 percent benchmark. CalPERS U.S. stock holdings earned approximately 30 percent, roughly matching the return for the Wilshire 2500; the System's overseas stock investments earned a 7.2 percent return, compared to a benchmark of 6.6 percent.

The fund's fixed income investments also outperformed its benchmark. Total fixed income investments returned 13.0 percent versus the Fund's benchmark of 11.8 percent. CalPERS internally managed fixed-income investments returned 14.8 percent, beating the Salomon Brothers Large Pension Fund Index of 13.8 percent, while the Fund's total domestic fixed-income investments returned 14.4 percent. International bonds outpaced the Salomon Brothers Non-U.S. Government Index, returning 4.9 percent versus 0.9 percent.

CalPERS real estate properties and specialized investments returned 18.1 percent compared to the 15.6 percent return for the industry's NCREIF Property Index.

At the end of the fiscal year, pension fund equity investments totaled $98 billion, fixed income investments totaled $39.1 billion, and real estate $6.2 billion. More than $15 billion of that is invested in California real estate, California-based public companies and California private ventures.

CalPERS is the nation's largest public pension fund. The System provides retirement and health benefits to more than 1 million state and local public employees and their families. For further information about the System, please visit CalPERS Web site at http://www.calpers.ca.gov.

Editor's Note: Attached is chart indicating CalPERS total fund market value and one-year return for the years ended June 30, 1988-1998. -0-

Fact Sheet
                          INVESTMENTS

                 CalPERS Total Fund Values and Returns

Year Ended June 30    Total Fund Market Value     One-Year Return %

   1998                   $143,300,000,000             19.50
   1997                   $119,713,377,000             20.09
   1996                   $100,765,605,000             15.31
   1995                   $ 87,933,723,000             16.31
   1994                   $ 76,913,771,000              1.95
   1993                   $ 76,022,978,000             14.53
   1992                   $ 67,827,411,000             13.38
   1991                   $ 61,469,960,000              6.74
   1990                   $ 58,156,105,000              8.94
   1989                   $ 52,615,479,000             16.55
   1988                   $ 45,668,071,000              3.93



    CONTACT: CalPERS, Sacramento
              Brad Pacheco/Pat Macht, 916/326-3991