California’s biggest pension fund and markets around the world learned to live with President Trump’s tariff threats. CalPERS gained 11.6% on investments in 2024-25.
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California’s largest public employee pension fund recovered from a spring stock market plunge and notched its second-best investment return in a decade, at least temporarily easing concerns about economic volatility in the new Trump administration.
The California Public Employees’ Retirement System announced Monday that it gained 11.6% on in its investments over the past financial year, eclipsing its target of 6.8%.
That’s a critical number in California government government finance both because CalPERS funds retirement plans for some 2 million people and because it charges government agencies more money to make up for losses when it misses its annual investment target.
CalPERS saw a steep drop in its portfolio in April after President Donald Trump announced tariffs against nearly every country. CalPERS lost about $25 billion that month, but regained the value and then some as Trump put off his most expensive tariffs and global markets adjusted to his tariff threats.
“Despite some market headwinds earlier in the year, our investment strategy paid off,” CalPERS Chief Investment Officer Stephen Gilmore said in a written statement. “The team remains poised to take advantage of investment opportunities as they develop and to strike the best possible deals to boost returns and cut costs for the fund.”
As of Monday, CalPERS has assets worth about $558 billion, up from a low in early April of $508 billion. It is considered underfunded because its portfolio is worth less than what it owes over time to California government employees and retirees. CalPERS’ gains over the last year increased its funded status to 79%.
It had wild swings in investment returns since the coronavirus pandemic, hitting a 21.3% gain in 2020-21, followed by a 6.1% loss the following year.
“In just two years, our investment returns have helped CalPERS increase the funded status to nearly 80% and rebound from the economic effects of the pandemic,” CalPERS Chief Executive Officer Marcie Frost said in a written statement.
CalPERS’ funded status is slightly lower than the national average, according to Equable, a nonprofit organization that monitors state and local government pension plans. It found the average funded ratio for pension funds in 2024 was 80.2%.
CalPERS leaders and executives from other pension plans throughout the year have warned about volatility in the new Trump administration, including the risk of a trade war. Frost, at an April board meeting, said “current events here in the U.S. could have a serious impact on our investment return” this year and next.
