These are modern railroads, but much bigger than the old ones.

Angelides calls on pension funds to invest $15B on infrastructure

California Treasurer Phil Angelides on Monday proposed that the nation's two largest public pension funds invest up to $15 billion to help pay for infrastructure projects around the state.

His so-called Cal-Build proposal would supplement, not replace, any infrastructure bond package approved by voters.

With Cal-Build, Angelides - who is running for governor on the Democratic ticket in this June's primary election - calls on the California Public Employees' Retirement System and the California State Teachers' Retirement System, both based in Sacramento, to invest up to 5 percent of their assets to finance the infrastructure projects.

The proposal, he said in a written statement, "will meet the double bottom line goals of achieving solid long-term returns for pensioners and taxpayers and building the infrastructure California needs to prosper in the 21st century."

Potential Cal-Build investments would include "smart, environmentally sound" water-supply and conservation projects, toll bridges and tunnels, energy transmission projects, energy conservation efforts in public buildings, and dedicated transportation facilities to move cargo from ports. The projects that would generate income from sources such as user fees.

"Cal-Build would benefit pension fund members and taxpayers while keeping the profits from California infrastructure projects in California for the benefit of Californians," Angelides said.

The funding would offer CalPERS and CalSTRS "another investment option to diversify their portfolios, offering a steady projected return of 6-8 percent."

Neither CalPERS nor CalSTRS have offered a response to the proposal. Angelides sits on the boards of both funds.

Assembly speaker Fabian Nunez voiced his support for the proposal, saying in a statement that it "would complement the legislature's efforts to address California's infrastructure needs. Its focus on smart growth and environmentally sound policy should be the cornerstone of any investment plan being considered."

CalPERS is the nation's largest public pension fund with $207 billion in assets. It administers retirement and health benefits for more than 1.4 million active and retired state and local government employees and their families.

With a $137 billion investment portfolio, CalSTRS is the second-largest public pension fund in the United States. It provides retirement, disability and survivor benefits to California's 776,000 public-school educators.
[ East Bay Business Times: Angelides calls on pension funds to invest $15B on infrastructure - 2006-04-03 ]