"Under the terms of our Investment Policy, a major personnel change, such as Mr. Gross' departure, results in the company being placed on watch status," spokesman Bill Wallace wrote in an email.

The retirement system had allocated about $2 billion in a core plus fixed income mandate to Pimco, about 8.51 percent of the total portfolio, as of June 30, Wallace said.

The resignation of Bill Gross, sometimes called the Bond King for his long track record in fixed income markets, sent shock waves through financial markets on Friday, even affecting prices for short- and intermediate-dated U.S. Treasuries.

(Reporting by Luciana Lopez; Editing by Chris Reese)