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CalPERS Comments on Federal Sentencing of Former CEO Fred Buenrostro

SACRAMENTO, CA – The California Public Employees’ Retirement System (CalPERS) today issued the following statements on the sentencing of its former Chief Executive Officer (CEO), Fred Buenrostro, in federal court in San Francisco on bribery charges. Mr. Buenrostro served as CEO of CalPERS from 2002 to 2008.

Rob Feckner, CalPERS Board of Administration President: “This saga has now come to an end. We are stewards of a sacred trust, and it must never be compromised for personal gain. As an organization, we’ve taken meaningful steps to strengthen accountability and transparency throughout CalPERS. We’ll continue to work to make sure these measures are rigorously followed and that we hold ourselves to the highest ethical standards.”

Anne Stausboll, CalPERS Chief Executive Officer since January 2009: “This chapter in our history is now behind us, and CalPERS has emerged a stronger, more dynamic organization. Over the past seven years, we have built a lasting, principled foundation for future success. More than ever, we’re focused on our service to our members and employers and to ensuring that the CalPERS Fund is secure for generations to come.”

Since 2009, CalPERS has put in place a number of critical measures that have greatly strengthened internal controls and risk management, improved accountability, and increased openness and transparency. They include:

Policies and Legislation

  • Requiring contractors, including external money managers, to disclose whether they’re using agents to seek the Pension Fund’s business, and to disclose how much they paid the agents
  • Co-sponsoring legislation (AB 1743) requiring placement agents who solicit the Pension Fund’s business to register as lobbyists. The law subjects placement agents to all lobbyist reporting and ethics rules under the California Political Reform Act
  • Limiting gifts to Board members and certain staff from individuals and firms doing business with CalPERS or seeking CalPERS’ business. The policy restricts gifts to Board members to a total of $50 per calendar year from any one person doing business with CalPERS or seeking to do business with the Pension Fund

Internal and Financial Controls

  • Appointing the first chief financial officer in the organization’s history to oversee an expanded financial office devoted to budgeting, risk management, internal controls, accounting, treasury management, and financial planning and analysis
  • Increasing the number of audits of public agencies to avoid pension fraud and abuse
  • Appointing a former federal prosecutor as general counsel of the organization

Public Accountability

  • Webcasting the Board’s monthly meetings over the Pension Fund’s website and posting more than 2,000 actuarial reports that provide a snapshot of the cost of pensions for contracting cities, counties, and local public agencies
  • Launching an Ethics Helpline that enables individuals to report concerns about possible workplace misconduct, including allegations of fraud, waste, abuse, conflicts of interest, harassment, and other potential misdeeds
  • Initiating and publicly releasing an 18-month special review of fees paid by CalPERS external managers to placement agents soliciting investments from the Fund. The review examined more than 70 million pages of information, and over 140 interviews were conducted

For more than eight decades, CalPERS has built retirement and health security for state, school, and public agency members who invest their lifework in public service. Our pension fund serves more than 1.8 million members in the CalPERS retirement system and administers benefits for more than 1.4 million members and their families in our health program, making us the largest defined-benefit public pension in the U.S. CalPERS’ total fund market value currently stands at approximately $293 billion. For more information, visit www.calpers.ca.gov.

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