California retiree group launches independent investigation into CalPERS
A group of California retirees has officially launched an independent investigation into the country’s largest public pension system over concerns with its investment practices and commitment to transparency.
Through a fundraising campaign, the Retired Public Employees Association has raised more than $181,000 to investigate the California Public Employees’ Retirement System’s use of private equity and the fees paid to money managers. While some individuals have contributed, most of that money has come from RPEA.
The funds are being used to hire longtime pension writer and financial investigator, Ted Siedle, who has conducted similar audits in the past, which have led to controversy between managers of state pension funds and retiree groups.
RPEA President Margaret Brown said she believes that CalPERS is unnecessarily withholding information from its members. She said she hopes that the report will ultimately lead to the creation of a new inspector general’s office to provide oversight of the retirement system.
One question at the center of RPEA’s investigation is whether the $587 billion pension fund spends too much money on fees to private equity investors and whether there needs to be more transparency in those deals.
Terry Brennand, SEIU California’s director of revenue, budget and pensions, agreed that the fees that private equity investors charge are too high, but the returns CalPERS receives on those investments — even after fees are taken into consideration — are worth the investment.
“We are paying too much in fees, but that’s the market,” Brennand said.
Additionally, Brennand agreed that private equity is less transparent than other assets held by CalPERS, but that feature is inherent to these investments in non-publicly traded companies. As the country’s largest pension fund, CalPERS demands more transparency from private equity firms and has secured a more favorable fee structure than other investors have been able to, he said.
Investments in non-publicly listed companies have proven lucrative for CalPERS. During the last fiscal year, CalPERS preliminarily reported an 11.6% overall return. Private equity outpaced some of the fund’s other investments with a 14.3% return. Public equity had a net rate of return of 16.8% during the last fiscal year.
Since 2022, CalPERS has nearly doubled its private equity holdings, from $50 billion to $92 billion.
“CalPERS has been recognized nationwide as a champion for increased disclosures and is regarded as one of the most transparent pension systems in the world,” CalPERS spokesperson Mary Lynne Vellinga said in a statement.
Vellinga said CalPERS randomly surveys about 75,000 of its members every year to make sure the retirement system is serving them well. “We consistently rank in the 80th and 90th percentile in terms of how we are managing the fund and providing information to members,” she said.
Siedle’s past reports have sparked controversy
Siedle is a former Securities and Exchange Commission lawyer who has conducted similar investigations in the past. For years, Siedle has critiqued pension funds across the county for conflicts of interest and excessive fees paid to investors.
In an interview, he said that more transparency around public pensions is a good thing. “What we’re doing is ensuring that these pensions are sustainable, viable, and well-managed,” he said.
But Siedle is a polarizing figure. His work has faced criticism from officials in states where he has cast doubt on the security of retirees’ benefits.
Over a decade ago, a state employee group in North Carolina tapped Siedle to look into its pension fund. The state treasurer and the fund’s chief investment officer said in 2014 that the resulting report contained multiple inaccuracies and unsupported allegations.
More recently, Siedle’s 2021 report on the State Teachers Retirement System of Ohio suggested that the pension fund’s underperforming investment returns were failing retired Ohioans. In response, the Ohio retirement system said, “Many of the conclusions in the report are offered with little support other than the author’s opinion.”
Siedle acknowledged that the pension funds he has investigated have disputed his finding. He doesn’t expect CalPERS will be any different. Though he said some funds have changed practices after his reports were published, such as a Minnesota pension fund, which increased its fee disclosures following Siedle’s investigation.
Seidle said he anticipated completing the investigation between January and March of next year.
Investigation largely funded by RPEA
This isn’t the first time the retiree group, which represents 22,000 of CalPERS’ more than 2 million members, has attempted to launch an independent investigation of the pension system. In 2022, the retiree group unsuccessfully petitioned lawmakers to request a management audit of CalPERS by the state auditor.
Earlier this year, the group announced that it was raising money to fund an independent investigation by Siedle. The target fundraising goal was set at $350,000.
When RPEA failed to secure that sum, Brown said that she went back to Siedle and asked to lower the cost of the investigation. Brown said they settled on a new price: $250,000.
A review of the public list of over 260 donations showed that of the money raised, RPEA or chapters of the group have contributed more than $149,000, or 82% of the total raised as of Monday.
Brown said she hoped some deep-pocketed members or concerned citizens would finance the investigation, but when that money didn’t manifest, the board agreed to pay the majority of the cost.
“The idea is not to scare retirees, the idea is to fix the issues that continue to plague CalPERS and their returns,” Brown said of the investigation.
If the report shows that there are no issues related to transparency or the sustainability of the pension fund, Brown said she will celebrate the good news and drop the issues. But she doesn’t expect that to be the case.
This story was originally published October 21, 2025 at 12:35 PM with the headline "California retiree group launches independent investigation into CalPERS."
