It’s their political agenda, stupid. Brett Joshpe writes in Forbes:

CalPERS is so notorious for its shareholder activism that investors have coined what is known as the “CalPERS Effect” for when companies come under the fund’s radar, and it owns over 130,000 shares of Massey Energy ( MEE – news – people ) and over 31 million shares of BP as of its 2008-2009 investment report.
While the Big Branch and Gulf Coast tragedies certainly warrant investigation, the real question is why a pension fund like CalPERS, whose payments are guaranteed by taxpayer dollars, is using public money to push its political agenda. This question should be especially pronounced in light of a recently released Stanford Institute for Economic Policy Research study, which reveals that CalPERS, along with the CalSTRS and the University of California Retirement System (UCRS), lost a staggering $109.7 billion between June 2008 and June 2009.
As the Stanford study revealed, California’s public pension funds are under-funded by a stated amount of $55.4 billion ($38.6 billion of which comes from CalPERS), but their actual shortfall is likely closer to $425 billion. The discrepancy is due to the fact that public pension funds discount future liabilities (what they will pay to retirees) at the rate that they expect to earn on investments, which is inherently uncertain. Under California law public pension benefits are guaranteed (i.e., risk free like Treasuries), meaning they should be discounted at a lesser risk free rate, rather than the current rate of 7.75%–an amount that is far from guaranteed, as the depletion of equity during the financial crisis demonstrated.
CalPERS is so notorious for its shareholder activism that investors have coined what is known as the “CalPERS Effect” for when companies come under the fund’s radar, and it owns over 130,000 shares of Massey Energy ( MEE – news – people ) and over 31 million shares of BP as of its 2008-2009 investment report.
While the Big Branch and Gulf Coast tragedies certainly warrant investigation, the real question is why a pension fund like CalPERS, whose payments are guaranteed by taxpayer dollars, is using public money to push its political agenda. This question should be especially pronounced in light of a recently released Stanford Institute for Economic Policy Research study, which reveals that CalPERS, along with the CalSTRS and the University of California Retirement System (UCRS), lost a staggering $109.7 billion between June 2008 and June 2009.
As the Stanford study revealed, California’s public pension funds are under-funded by a stated amount of $55.4 billion ($38.6 billion of which comes from CalPERS), but their actual shortfall is likely closer to $425 billion. The discrepancy is due to the fact that public pension funds discount future liabilities (what they will pay to retirees) at the rate that they expect to earn on investments, which is inherently uncertain. Under California law public pension benefits are guaranteed (i.e., risk free like Treasuries), meaning they should be discounted at a lesser risk free rate, rather than the current rate of 7.75%–an amount that is far from guaranteed, as the depletion of equity during the financial crisis demonstrated.

Worth a read in its entirety.