California Public Employees' Retirement System board president Priya Mathur has lost her re-election campaign to a challenger whose platform included rejecting the pension's push for environmental, social and governance investing strategies.

The unofficial results showed Jason Perez, a sergeant for the police department of Corona, Calif., received 9,208 votes to Mathur's 7,008 votes.

Perez campaigned on driving the fund's return higher to escape an asset shortfall that has dogged it for years. The pension's assets are worth only about 71% of what it owes in retirement payouts to public employees.

Perez took aim at Mathur's support for ESG investing, arguing that doing so distracted the pension from its objective of hitting an annual return that would narrow its funding gap. Some ESG-focused exchange-traded funds are beginning to outperform investment vehicles without that strategy, a July S&P Global Market Intelligence study found.

Mathur's loss will mean the pension's board must elect a new president in January 2019. CalPERS appointed a new chief investment officer in September.