CalPERS denied the cuts.
"The article is speculation at best," CalPERS spokesman Joe DeAnda said in a statement to CNBC.com. "It's been no secret that the program is under review; the board has discussed this several times in open session. No decisions have been made about the program."
"During the review, the (Absolute Return Strategies) portfolio may change in size and structure. Conclusion of the review, and formal decisions about the program, likely will not occur until Q3 2014 at the earliest," DeAnda added. "Furthermore, any permanent changes to the program will come about in formal direction from the board after discussion with staff and analysis of the review."
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CalPERS is the sixth largest pension plan in the world, according to a 2013 survey by Towers Watson and P&I.
Its hedge fund investments at the end of 2013 included funds from Och-Ziff Capital Management, BlueCrest Capital Management and Bain Capital, according to public documents. CalPERS started investing in hedge funds in April 2002, before so-called alternative investments become common by public pensions.
Read the full P&I story here.