Investment Chief of CalPERS, Country’s Largest Pension Fund, Steps Down

A view of California Public Employees' Retirement System (CalPERS) headquarters in Sacramento, Calif., on Feb. 14, 2017. (Max Whittaker/Reuters)

Ben Meng, who managed California’s $400 billion pension fund—the nation’s largest—has resigned as chief investment officer at California Public Employees’ Retirement System (CalPERS) after about a year and a half in the role.

CalPERS oversees benefits for more than 2 million of the state’s public employees.

Meng’s China ties—first highlighted in a July 2019 Epoch Times report—drew increasing scrutiny from U.S. officials.

Meng said through an Aug. 5 statement from CalPERS that he wishes to “focus on my health and on my family and move on to the next chapter in my life.” The fund didn’t provide a reason for Meng’s abrupt departure. Dan Bienvenue, the deputy chief investment officer, will serve as the interim CIO as CalPERS searches for a permanent successor.

Meng, who came to the United States at 25 and later became a U.S. citizen, first worked for CalPERS as an investment director from 2008 to 2015.

From 2015 until he was hired as CalPERS CIO in January 2019, he was deputy CIO at China’s State Administration of Foreign Exchange (SAFE), an administrative agency under the State Council in charge of the country’s roughly $3 trillion in foreign reserves.

CalPERS reported a return of 4.7 percent for the year ending in June, missing its 7 percent target return necessary to fulfill its pension obligations, according to a recent statement. It lost about $70 billion in asset value in late February and March as global stock markets crashed amid the pandemic, although the fund said it was able to recuperate almost all of the losses by the end of June.

The California state executive agency credited Meng with helping the fund beat the “benchmark of 4.3% during a time of extreme financial market volatility sparked by the coronavirus pandemic.”

‘Cozy’ China Ties

Meng’s stint at a Chinese state agency and the pension fund’s growing investments in Chinese companies had attracted attention amid the administration’s hardening stance on the Chinese regime’s influence.

“Some of the CalPERS investment policies are incredibly concerning,” U.S. national security adviser Robert O’Brien said on March 11 during an appearance at the Washington-based think tank Heritage Foundation. He described it as “an issue of security for American investors.”

“We’ve got folks who are going to rely on their pension for their retirement, and putting those investments into companies that ... don’t have the same reporting requirements that American companies do, is scary.”

Meng had been a participant in the Chinese government’s headhunting program called the Thousand Talents Plan (TTP) until 2015, when he was recruited to SAFE, according to a 2017 report by official Chinese regime mouthpiece People’s Daily.

Beijing has hired thousands of researchers and high-level professionals over the past decade through the program to boost its global tech ambitions. An FBI official, in 2018 testimony before the U.S. Senate Judiciary Committee, flagged the program as “China’s nontraditional espionage against the United States.”

In a Feb. 13 letter to California Gov. Gavin Newsom, Rep. Jim Banks (R-Ind.) called for a “thorough investigation” into Meng’s China links, citing his “long and cozy” relationship with the Chinese Communist Party.

When interviewed by People’s Daily in 2017 about his return to China, Meng said that “in a person’s life, if there is an opportunity to contribute to the motherland, this responsibility and honor is unmatched by anything.”

Chinese state media had largely showered praise over Meng’s success at SAFE, and also wrote positive reports when he later decided to leave SAFE and return to CalPERS.

Banks said he “would fire Mr. Meng immediately,” if it was his call.

When contacted for comment on Meng’s resignation and ties to China, CalPERS referred The Epoch Times to the public statement.

Chinese Investments in Question

The pension fund held 240 Chinese bonds as of June 30, 2019, marking a 40 percent jump from the 172 names in the previous year, according to CalPERS’s annual report. The types of investments span corporate bonds, domestic and international securities, and private investments.

The pension fund held 63.1 million shares in China Unicom, a state-run telecommunications provider that built North Korea’s internet network, and which the Federal Communications Commission threatened to bar from the United States over national security risks. Hikvision, a Chinese surveillance equipment manufacturer that CalPERS invested in, was recently placed on a federal trade blacklist over its role in human rights abuses in Xinjiang.

As of June 30, 2019, CalPERS also held 5.7 million shares in the state-owned China Communications Construction Co., which has built naval and military bases in the disputed South China Sea. The Chinese regime considers most of the waterway as part of its territory, despite a 2016 international court ruling against its claims.

Banks applauded Meng’s departure on Aug. 6. “Taxpayers shouldn’t be forced to fund our adversary’s military,“ he said in a statement. With Meng leaving, ”CalPERS now has the opportunity to correct its course and divest from companies within China’s military-industrial complex.”