CalPERS requires contractors to disclose conflicts of interest.

SACRAMENTO, Calif.--(BUSINESS WIRE)--Sept. 22, 1995--If you are one of the hundreds of contractors who provides $25,000 or more in goods and services to the California Public Employees' Retirement System, you'll have to disclose any financial relationships with Board officials under a new ethics program.

At its September meeting, the 13-member Board adopted a staff proposal that will ensure the Board does not unwittingly approve contracts that might further the financial interests of present or former Board members or officers. CalPERS is believed to be the first large state board to create disclosure requirements for contractors.

"We are dead serious about our duty to protect the CalPERS fund against abuse," said James Burton, chief executive officer, who proposed the policy to reduce the potential for the appearance of conflicts of interest. "With this policy, the Board, our 1 million system members, and the public can be assured that decision making is above board and beyond reproach."

Under California's Political Reform Act, pension fund officials are required to make disclosures of business interests, as well as gifts or loans, but the law does not require bidders or existing contractors to do so.

The new Board policy will affect hundreds of investment consultants, real estate advisors, developers, as well as those engaged in general administrative procurement with the system.

Dr. William D. Crist, Board president, praised the policy, saying it gives every Board member more complete information. "Now each member can be assured there are no skeletons in the closet prior to voting on contracts, lending greater credibility to the decision-making process."

The type of financial relationships that must be reported include partnerships, full or part time employment, consultant relationships, mutual investments in real estate, securities or other properties. The policy also requires reporting all gifts or loans to designated CalPERS officials in the amount permitted by the Fair Political Practices Commission.

In addition to new companies seeking contracts from CalPERS, the policy will also be applied on a voluntary basis to existing contractors providing goods and services over $25,000.

The new disclosure policy is the latest in a series of actions designed to ensure high standards of ethics in Board decision making. The Board in September also adopted a policy against Board member attendance at pre- and post-Board meeting dinners or other functions sponsored by advisors, managers, consultants, contractors or general partners.

Earlier this year, the Board tightened its rules governing official travel, requiring Board approval for all Board member trips and a requirement that details of their expenses be disclosed. In addition, CEO Burton established a policy requiring managers to fully disclose the value of all meals or gifts paid for by others, regardless of amount.

CalPERS is the nation's largest public pension fund, with assets exceeding $90.7 billion. It provides over 1 million members with retirement and health benefits.

CONTACT: CalPERS

Pat Macht, 916/326-3850