April 15 (Bloomberg) -- The California Public Employees’Retirement System, the largest U.S. pension, paid Wall Street firmsalmost $1.2 billion last fiscal year to manage investments, up 20percent from a year earlier.

Calpers said fees paid to external firms for performance morethan doubled in the year that ended June 30 to $377.6 million, upfrom $165 million the previous year, according to a report releasedyesterday. Base fees declined 2 percent to $790.5 million. The fundhad $285.8 billion under management as of April 14.

Calpers earned 13.2 percent last fiscal year, almost double the7.5 percent it said it needs each year to cover the costs ofbenefits promised to retirees. After losing almost a quarter of itsvalue in 2009, the fund has made 3.5 percent in the five years thatended June 30.

The fund said total investment costs were about 53.5 basispoints, the same as the previous year and up from 49.4 basis pointsin 2008, according to the report. Costs in 2013 were 5.8 basispoints less than the fund’s benchmark, Calpers said. The costs werehigher over five years, the fund said, because it increased itsallocation of hedge funds and private equity. A basis point is 0.01percentage point.

In all, the pension fund paid $1.3 billion, includingconsultants and administrative costs, for portfolio management.That’s up from $1.1 billion a year earlier. Calpers said the costof investment operations declined by $80 million in the last twofiscal years.

The fund found savings by reducing external management fees andthe number of consultants, as well as moving management functionsfrom outside to within the organization, Calpers said.

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