Nation’s largest public pension fund plagued by secrecy and underperformance, probe finds

EXCLUSIVEU.S. newsU.S. newsNation’s largest public pension fund plagued by secrecy and underperformance, probe findsThe independent report was commissioned by a nonprofit group that includes retirees who were concerned about the $630 billion California Public Employees’ Retirement System.Listen to this article with a free account00:0000:00The headquarters of the California Public Employees' Retirement System, or CalPERS, in Sacramento.Xavier Mascarenas / TNS via ShutterstockShareAdd NBC News to GoogleMay 22, 2026, 6:00 AM EDTBy Gretchen MorgensonAn independent investigation into the nation’s largest public pension, the California Public Employees’ Retirement System, concluded that its 2.4 million members are imperiled by secrecy, chronic underperformance, understated investment costs and conflicts of interest.Subscribe to read this story ad-free Get unlimited access to ad-free articles and exclusive content.The report was commissioned last year by a nonprofit advocacy group that includes beneficiaries of the $630 billion fund who were concerned about its lagging performance and lack of transparency. They took the unusual step of hiring their own investigator, a former Securities and Exchange Commission lawyer, after a failed effort to persuade state legislators to order an audit of the fund and to require the creation of an inspector general to oversee it.Among the report’s key findings:The fund’s returns placed it in the bottom 15% of all 230 U.S. public pension funds for five- and 10-year periods.Some 9% of the pension’s assets are in aging private equity partnerships, known as zombie funds, that are having difficulty selling the companies they have invested in. These funds are “consuming management fees but producing little or no return for investors.”The fund’s staffers receive “excessive compensation” despite its dismal performance. Four executives make more than $1 million a year, another four more than $900,000 and 26 earn between $500,000 and $900,000.“...