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

An independent investigation into the nation’s largest public pension, the California Public Employees’ Retirement System, has been completed.

An 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.

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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: