CalPERS — the California Public Employees' Retirement System — is the largest public pension fund in the United States, managing roughly $600 billion for about 2 million members. It invests across global equities, private equity, real assets, fixed income and private debt to fund retirement benefits for California's state and local public workers.
The California Public Employees' Retirement System — CalPERS — is the largest public pension fund in the United States and one of the most closely watched asset owners in the world. It manages retirement and health benefits for roughly 2 million Californians and invests a portfolio that, by the end of 2025, was worth close to $600 billion. When CalPERS changes how it allocates capital, the rest of the institutional market pays attention.
How big is CalPERS?
CalPERS' core investment pool, the Public Employees' Retirement Fund (PERF), reached a total market value of approximately $599.5 billion as of 31 December 2025, up from roughly $556 billion at the close of its 2024-25 fiscal year (30 June 2025). That scale places CalPERS ahead of every other US public pension system and among the twenty or so largest asset owners globally, alongside sovereign wealth funds and the biggest Canadian and Asian pension plans.
Scale matters for a pension fund in a specific way. A portfolio this large cannot trade nimbly in and out of positions; it has to think like a long-term owner of the market rather than a stock-picker, which is precisely the posture of a universal asset owner. It is large enough that its private-market commitments alone reshape fundraising for entire categories of managers.
What is CalPERS' funded status?
Funded status is the single number that defines a pension fund's health: the ratio of assets it holds to the benefits it has already promised. CalPERS estimated its funded status at about 83.7% as of 31 December 2025, an improvement from 79% at 30 June 2025. A figure below 100% means there is a gap between promises and assets — one that future contributions from employers and members, plus investment returns, are expected to close over time.
The improvement in 2025 was driven largely by strong investment performance. CalPERS reported a preliminary net return of 11.6% for the fiscal year ending 30 June 2025, well above the 6.8% assumed rate of return the fund uses for long-term planning. Because that 6.8% figure also serves as the discount rate applied to liabilities, it sits at the centre of the system's funding math: a lower assumed return would make the liabilities look larger and the funded status weaker.
How does CalPERS invest its money?
CalPERS runs a diversified institutional portfolio built for long-horizon total return. As of early 2026, the broad shape was:
- Public equity — the largest single block, worth over $225 billion (roughly 36% of the fund). This is CalPERS' core exposure to the growth of the global listed economy.
- Private equity — approximately $121 billion, reflecting a deliberate expansion of the programme in recent years to capture the illiquidity premium.
- Fixed income — public bonds providing income and downside ballast.
- Real assets — real estate and infrastructure, prized for inflation-linked, long-dated cash flows.
- Private debt — a programme launched in 2022 to lend directly and capture yield outside public markets.
In 2025 the CalPERS board adopted what it described as a more streamlined investment approach, designed to let staff act faster on market opportunities rather than wait on lengthy approval cycles — a recognition that a fund of this size needs decision speed to compete with sovereign funds and private managers for the best assets.
Why CalPERS expanded private markets
The logic behind CalPERS' tilt toward private equity, private debt and real assets is the same logic that drives the largest sovereign and pension funds worldwide. A fund with a multi-decade horizon and limited near-term liquidity needs can afford to lock up capital in illiquid assets in exchange for higher expected returns — the illiquidity premium. With a 6.8% return target to hit and a funded status still short of 100%, public equities and bonds alone have historically struggled to deliver, pushing CalPERS toward private markets to bridge the gap.
That shift is not costless. Private markets carry higher fees, less transparency and valuation lags, and they tie up capital for years. The trade-off CalPERS and its peers make is that, managed well and at sufficient scale, private allocations earn enough excess return to justify those frictions over a full cycle.
Who does CalPERS serve?
CalPERS provides retirement and, separately, health benefits to about 2 million members — active and retired employees of the State of California, more than a thousand participating local public agencies, and school districts. It was established in 1932 and operates as a defined benefit system, meaning members are promised a retirement benefit based on salary and years of service rather than on the performance of an individual account. That promise is what creates the liability the investment portfolio exists to fund.
Why allocators watch CalPERS
For asset managers, banks, consultants and data providers, CalPERS is both a bellwether and a buyer. It was an early and influential voice on corporate governance and stewardship, and the terms it negotiates — on private-equity fees, on co-investment rights, on proxy voting — tend to become reference points across the institutional market. When CalPERS increases or trims an allocation, it moves real money and signals sentiment about a sector or strategy.
It is also a case study in the central tension of public pension management: balancing the duty to pay promised benefits with the political and funding pressure created by a persistent gap between assets and liabilities. How CalPERS navigates that tension — through return assumptions, contribution policy and asset allocation — is studied by every other large public plan.
In plain English
CalPERS is the retirement fund for California's public workers. It collects contributions, invests close to $600 billion across global markets and private assets, and uses the returns to pay pensions. It currently holds about 84 cents of assets for every dollar of benefits it has promised, and it leans on private equity, real assets and private credit to try to close that gap over the long run.
Sources and further reading
- CalPERS — Investment Fund Values and monthly performance update (public equity ~$225.3B, private equity ~$120.8B as of April 2026).
- CalPERS — total fund market value of $599.5 billion as of 31 December 2025; funded status 83.7%.
- CalPERS Newsroom — preliminary 11.6% net return for fiscal year 2024-25; funded status 79% at 30 June 2025.
- CalPERS — 6.8% assumed rate of return / discount rate.