CalPERS Makes Slight Change to Permissible Emerging Equity Market Policy.

Business Editors

SACRAMENTO, Calif.--(BUSINESS WIRE)--Feb. 18, 2003

The California Public Employees' Retirement System's (CalPERS) Board of Administration today voted to add Jordan to its permissible emerging equity market policy and retain the Philipines.

Investable equity markets include Argentina, Brazil, Chile, Czech Republic, Hungary, Israel, Jordan, Mexico, Peru, Philippines, Poland, South Africa, South Korea, Taiwan and Turkey.

Investments in the following equity markets will continue to be on the non-investable list: India, Malaysia, Morocco, Sri Lanka, Thailand, Colombia, China, Egypt, Pakistan, Russia, Venzuela and Indonesia.

The pension fund's board took the action following an analysis by its pension consultants Wilshire Associates. Wilshire reviewed 27 emerging equity markets against a variety of financial factors plus other factors such as transparency, political stability and labor practices/standards.

"The Philippine government came before us today and provided some important information for us to consider about their economy and markets," said Robert Carlson, , Acting President of CalPERS Board of Administration. "We have directed our consultant to work with the government and review the findings of the current study."

Wilshire had recommended that the Philippines not be included in the investable universe after its score had fallen from last year.

CalPERS Board asked that the process for removing an equity market from the list be reevaluated to avoid unnecessary transaction costs. The pension fund's trustees also asked Wilshire to revisit the Philippine's status.

CalPERS has approximately $1.6 billion currently invested in the emerging markets, including $30 million in the Philippines.

"This was the first annual review of our policy, one that will continue to be shaped to achieve risk-adjusted returns for our beneficiaries," said Sean Harrigan, Acting Chair of CalPERS Investment Committee.

Fifty percent of the review is based on factors such as market liquidity and volatility, market regulation and investor protections, capital market openness, settlement proficiency, and transaction costs. Political stability, financial transparency and labor standards accounted for the remaining 50 percent.

Wilshire Associate's full report on the emerging markets can be found on CalPERS web site at www.calpers.ca.gov; click CalPERS Board Meeting Information, then Investment Committee.

CalPERS is the nation's largest public pension fund with assets of approximately $133 billion. The System provides retirement and health benefits to 1.3 million State and local public employees and their families.