Wall Street cares a lot more than you might think about retired government workers. Investment managers rack up hefty fees managing money for giant pension funds. CalPERS, which manages some $300 billion of California pension money, is now changing the game by cutting back half its money managers.

CalPERS believes it has way too many people managing its money, charging way too much. Public pension funds have enough trouble just finding enough money to pay retirees, so they’re all under pressure to cut expenses.

It’s not that CalPERS is dropping Wall Street to go its own way. It’s more about buying in bulk, says Leora Friedberg, a University of Virginia economics professor. 

“They’re going to then concentrate a bigger share of their total funds with a smaller group of managers,” Friedberg says. 

CalPERS wants to more easily track performance and drive a harder bargain on those fees. Some on Wall Street could make more money. Others will lose out.

And CalPERS is just the beginning, says Steven Davidoff Solomon, a law professor at UC Berkeley.

Other pension funds could follow suit, forcing Wall Street investment managers to fight harder for business by slashing fees.

The CalPERS fight is also a reminder to regular folks with 401(k)s and other human-size investments. Take a close look at the fees you pay, or they could devour your savings.