calpers

CalPERS to receive more than $300 million from federal settlement with S&P

Sacramento-Business-Journal

Feb 3, 2015, 2:40pm PST
Allen Young
Staff Writer- Sacramento Business Journal

California’s giant public pension system said Tuesday it stands to receive $301 million from a settlement with Standard & Poor’s announced earlier in the day by federal and state prosecutors.

The settlement is the result of charges made by the California Public Employees’ Retirement System against the credit-rating agency for investments that collapsed during the financial crisis. CalPERS filed two lawsuits, including one that charged S&P with artificially inflating credit grades on residential mortgage that floundered.

The deal is part of a $1.37 billion settlement with S&P, a unit of McGraw Hill Financial Inc. The company is trying to resolve lawsuits filed by the U.S. Department of Justice and more than a dozen states that accused it of inflating credit ratings to win more business from issuers.

CalPERS has recovered approximately $900 million from settlements related to losses from the financial crisis. During the crisis, the fund lost more than a quarter of its value. CalPERS currently has assets of $293 billion.