The chief investment officer of the biggest U.S. pension fund is most worried about low interest rates as the California Public Employees’ Retirement System struggles to earn enough money to pay beneficiaries.

“It provides the greatest stress on our portfolio as a whole as we try to achieve a 7.5 percent rate of return,” Ted Eliopoulos said in an interview Tuesday at the fund’s governing board meeting in Walnut Creek, California.

The $300 billion fund said Monday that it earned 2.4 percent in the last fiscal year, below its 7.5 percent target rate. When it falls short, it must turn to taxpayers to make up the difference. Stock and bond market volatility caused by uncertainty over when the Federal Reserve will increase rates depressed returns.

Near-zero interest rates for more than five years have led investors into riskier assets as they search for returns, the demand pushing prices higher and narrowing the compensation they get for that added risk.

Investors from BlackRock Inc.’s Laurence D. Fink and Janus Capital Group Inc.’s Bill Gross have highlighted the rate environment’s effects on pension funds and insurance companies, which rely on returns from their investments to help pay claims.

“The current low interest rate environment poses a significant risk for the long-term financial viability of pension funds and insurance companies, as they seek to generate sufficient returns to meet promises,” the Organization for Economic Co-operation and Development said in a June report.

Eliopoulos said he’s concerned about whether the Federal Reserve “and the other central banks are going to be able to unwind this quantitative easing program in a way that allows growth to occur and interest rates to rise.”

Calpers is reevaluating its strategies and culling some external managers to cut fees as it seeks to close a gap between how much money it takes in from investments and contributions and how much it must pay out in claims. In September, it eliminated its $4 billion hedge fund program, citing complexity and cost.

Calpers, based in Sacramento, has earned 10.9 percent over a three-year period and 10.7 percent over five years.