CalPERS Investment Fund Reaches $100 Billion.

SACRAMENTO, Calif.--(BUSINESS WIRE)--June 18, 1996--The California Public Employees' Retirement System (CalPERS) announced today that the system's investment portfolio has reached a historic milestone, passing the $100 billion mark on May 14, 1996.

"This achievement represents 64 years of continued growth and sound investment strategy," said Charles P. Valdes, CalPERS Investment Committee chairman. "Reaching this symbolic milestone serves as an important reminder to the one million members we serve. First, and foremost, they can be assured that their investments in this fund are safe and are growing steadily over the long term."

The system began operations in 1932. Its assets at that time were valued at $800,000. In 1986, CalPERS' fund stood at $37.7 billion and has realized $62.3 billion in investment gains over the last decade.

Initially, CalPERS invested in U.S. Government and municipal bonds and expanded its universe of investments in 1947 to include public utility bonds. Real Estate mortgage investments began in 1964, with the purchase of FHA-VA loans. Three years later, following a voter approved constitutional amendment, CalPERS began investing in equity securities or stocks.

Approximately 81 percent of the total fund comes from investment returns, while the remaining difference is contributed by employers and employees. Employer contributions total about 11 percent, while employees provide about 8 percent.

"The fact of the matter is that $100 billion and even more will be needed for the increased number of people who will be seeking retirement in the next 20 years," explained Valdes. "A strong fund helps to minimize and stabilize contributions required of employers and employees to maintain benefits. The tremendous return on investments helps keep public costs down, in that it minimizes the amount of money needed from public employers and ultimately taxpayers."

CalPERS currently disburses nearly $4 billion in retirement benefits annually. As an increasing number of the one million members covered by the system retire in the decades ahead, the fund's disbursements will soar to $34 billion by the year 2024.

Seeking to improve the return on its investments, CalPERS recently reaffirmed its strategic asset allocation policy that calls for the system to increase the domestic and international equity component of the fund to 63 percent.

Yesterday, CalPERS announced it earned a 20.1 percent return on its investments for the 12-month period ending March 31, 1996. This performance compare favorably to returns for the previous one-year period, when the system earned an 8 percent return for the 12 months ended March 31, 1995.

The system provides retirement and health benefits to one million current and retired public employees and their families.

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Note to Editors: A 64-Year Investment Fund Growth graphic is available through CalPERS' Public Affairs Office, phone [phone].

CONTACT: California Public Employees' Retirement System

Office of Public Affairs

Brad Pacheco/Pat Macht, 916/326-3991