U.S. pension plans that invest more than $900 billion on behalf of their members said Tuesday that they should have freedom to invest in a full range of opportunities, including alternative investments like hedge funds and private equity.

America’s largest pension funds issued their manifesto on market regulation reform that included their call for freedom to invest. The plans include America’s two largest pension funds, the California Public Employees’ Retirement System (CalPERS) and California State Teachers’ Retirement System (CalSTRS). They were joined pension funds from Los Angeles City and County, Colorado, Connecticut, Maryland, New York and Illinois.

“The ability to invest, consistent with fiduciary responsibilities, in an unconstrained investment opportunity set is critical to enable public pension funds to meet their obligations,” the statement said. “Any limitations on the universe of available investments will potentially reduce the ability of these funds to generate the needed returns and may increase the risk of the plan.”

A spokesman for CalPERS confirmed that the pension funds were including investments in hedge funds and private equity in that assertion.

“We want to have all the tools in the box at our disposal; all the tools that a smart investor uses,” the spokesman said.

With investment advisor fraud very much on the mind of Congress, including the alleged $50 billion Ponzi scheme run by broker-dealer Bernard Madoff, the pension funds want to make sure that legislators don’t move back to the old days when they could only invest in specific products.

The pension plans also want to see the Securities and Exchange Commission restored to its position as a first responder in protecting investors against fraud.

The SEC has come under intense fire because it missed the alleged $50 billion Ponzi scheme carried out by broker-dealer Bernard Madoff. There has been talk of shifting some or all of the agency’s powers to the Federal Reserve. But not only do the pension plans want the SEC to retain its policing powers, but it wants them to tailor it to fit the kind of investor and product involved.

“For example, enhanced protections for institutional investors may take the form of tools (e.g., enhanced disclosure by issuers) that such sophisticated investors may use to protect themselves,” the statement said.

A spokesman for CalPERS said, while the call for greater transparency was primarily directed at corporate issuers, transparency at hedge fund and private equity firms was an issue that might be addressed in the future.