CalPERS announces compliance with the Global Investment Performance Standards from CFA Institute

California Public Employees’ Retirement System (CalPERS), the largest defined-benefit public pension in the United States and the seventh largest worldwide, announced its adoption of the Global Investment Performance Standards (GIPS^®) from CFA Institute. Introduced in 1999, the GIPS standards are universal, voluntary standards based on the fundamental principles of full disclosure and fair representation of investment performance. The GIPS standards are administered globally by CFA Institute and have been adopted by 1,653 firms in more than 40 markets around the world, including some or all of the assets of the 24 of the top 25, and 85 of the top 100, asset management firms, according to data from Cerulli Associates.

While many asset owners require their investment managers to comply with the GIPS standards, it is less common for asset owners like CalPERS to apply the principles in their own performance reporting to oversight boards, governing bodies and plan beneficiaries. By adopting the GIPS standards, CalPERS has displayed ethical leadership in the public pension industry by adopting the highest performance standards often required of the investment managers they hire.

“The GIPS standards allow firms to demonstrate that investment performance reporting meets globally accepted ethical best practices,” said Robert Paterson, Investment Manager at CalPERS. “As an asset owner, adopting the GIPS standards indicates our commitment to use the highest rigorous performance calculation and presentation standards in our reporting. The GIPS standards are a critical part of our commitment to integrity, transparency, and the interests of our beneficiaries.”  

CalPERS is one of a handful of asset owners to comply with the GIPS standards, and CFA Institute expects to see more follow the lead of the pension plan sponsor. 

“While many hundreds of asset managers around the world have adopted the GIPS standards as a way to strengthen reporting and boost transparency, CalPERS is an example of a leader that is truly advancing the investment profession by employing a higher standard,” said Paul Smith, CFA, president and CEO of CFA Institute. “We applaud CalPERS for their efforts to put beneficiaries first, and we encourage more asset owners to follow their lead to promote fairness, transparency and ethics in investment performance.”  

GIPS compliance is the latest effort by CalPERS to join CFA Institute in advancing its mission to raise professional standards in investment management. The plan sponsor is a vocal advocate of the CFA Institute Asset Manager Code, a voluntary code of conduct that helps asset managers practice ethical principles that put client interests first. And in 2016, CalPERS joined with seven other influential pension plan sponsors to publish an open letter in major media outlets such as The Wall Street Journal to express support for the code. The following year, CalPERS was one of 16 firms to unite for a similar open letter. CFA Institute is also working with CalPERS on efforts to raise the standard for diversity and inclusion in investment management.

Though not mandatory, compliance with GIPS was verified for CalPERS by GIPS consulting and verification service The Spaulding Group.  

For more information on GIPS, visit www.gipsstandards.org.