CalPERS CIO Ted Eliopoulos said during a Monday board meeting that he expects his portfolio’s return to be flat in FY 15-16; and that the next few years will be challenging for the country’s largest pension fund.
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California Public Employees’ Retirement System Chief Investment Officer Ted Eliopoulos on Monday described the pension fund’s current fiscal year performance as “likely to be flat, which is a nice way of saying zero.”
On Monday, Eliopoulos warned CalPERS Investment Committee that the coming three to five years will be “a challenging market environment for us.”
“It is going to test us,” he said at the board meeting.
CalPERS lowered its performance expectations in each major asset class.
The fund’s primary pension consultant, Wilshire Associates, predicted that the total fund, estimated to be worth $293.6 billion, will return 6.4 percent annually over the next decade, reduced from a 2013 forecast of 7.1 percent.
Wilshire’s largest cuts to forecasts for CalPERS’ annual returns were in global equity, reduced to 6.7 percent from 7.75 percent, and private equity, which it cut to 9.4 percent from 10.45 percent.
CalPERS returned 2.4 percent in FY 14-15, following several years of double-digit returns.