Your Wednesday editorial ("CalPERS must be held accountable") demonstrates a severe misunderstanding of CalPERS' pension fund investment strategy, and mischaracterizes how a single-year return will actually impact public agencies.

Allow me to set the record straight.

First off, CalPERS is a long-term investor. This concept is either ignored or misinterpreted by the media on a regular basis and is the greatest source of misunderstanding and misinformation there is.

As a long-term investor, we fully expect a range of possible returns every year. Occasionally returns will be negative, and occasionally returns will be wildly high, such as last year's 21.7 percent gain. This year, based on poor market conditions, we expected returns of around 1 percent, and that's what we earned just shy of our 1.7 percent benchmark goal.

Historically, CalPERS has regularly outperformed our long-term 7.5 percent goal over a 20-year average, and we did it again this year. If you look at our 30-year average, we exceed 9 percent.

If you insist on looking at returns on a single-year basis, we posted gains not just in excess but in significant excess of 7.5 percent 13 times in the past 19 years.

We are long-term investors, and we use investment strategy to reach our long term goals.

As our chief investment officer, Joe Dear, stated, "The key to having a strategy is working with it. The worst mistake is to abandon the strategy when it appears to have some trouble."

Our strategy is working. We've made up millions of dollars in losses that occurred when the market bottomed out in 2008-09.

This year, our real estate portfolio managers have turned losses into gains. And, of course, as our CIO stated, we will look at managers that underperformed, and we will adjust our approach to cope with continued volatility in the markets.

In the meantime, this year's 1 percent return will be reflected in employers' contribution rates two years from now. Just as when we have large gains, losses are spread over 30 years to ensure employer rates remain as stable and predictable as possible. Any increases due to this year's returns will be very small.

And finally, adjustments in employee contribution rates are undertaken in collective bargaining and are not adjusted based on high or low investment returns in any given year.

(Robert Udall Glazier is deputy executive officer for external affairs at the California Public Employees' Retirement System based in Sacramento.)