Responsible Contractor Program Policy

Purpose

This document sets forth the investment policy (“the Policy”) for the Responsible Contractor Program (“the Program”). The design of this Policy ensures that contractors, investors, managers, consultants, or other participants selected by the California Public Employees’ Retirement System (“the System”) take prudent and careful action while managing the Program. Additionally, use of this Policy provides assurance that there is sufficient flexibility in controlling investment risks and returns while using contractors.

Introduction

The California Public Employees’ Retirement System (“the System”) has a deep interest in the condition of workers employed by the System and its advisors or partners. The System, through the Responsible Contractor Program Policy (Policy) described below, supports and encourages fair wages and benefits for workers employed by its contractors and subcontractors, subject to fiduciary principles concerning duties of loyalty and prudence, both of which further require competitive returns on the System’s real estate investments.

The System endorses small business development, market competition, and control of operation costs. The System supports many of the ideals espoused by labor unions and encourages participation by labor unions and their signatory contractors in development and management of the System’s real estate investments. The System believes that an adequately compensated and trained worker delivers a higher quality product and service. This Policy shall complement and in no manner detract from the System’s existing Policy regarding service-disabled California veteran owned business enterprise. The Policy is consistent with the recommendations of fiduciary counsel in the letter to the System’s General Counsel dated December 7, 1992 and includes provisions for transition, monitoring, and enforcement.

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