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A Brief History of CalPERS: Serving Members Since 1932

CalPERS is about the dedicated individuals who serve, or have served, the State of California through a career in public service. ​But how much do you really know about CalPERS? Let’s take a closer look about how we came to be.

Establishment and Early Years

Sweeping national reforms from the 1920s — along with lack of public assistance for those who were beyond their working years — led to the establishment of the State Employees’ Retirement System (SERS) on January 1, 1932.

SERS was responsible for investing its member contributions in sound financial instruments — a difficult task while the country was in the throes of the Great Depression. SERS originally had 13,652 eligible members. It doubled in 1939 when membership expanded to include cities, counties, school districts, and special districts. Today we have over 2 million members — over 750,000 are retirees and beneficiaries receiving a monthly allowance.

Building a Solid Foundation

In 1940 the Department of Finance hired Rene L. Rothschild as an investment adviser. During his two decades of service, he built up the Fund investment portfolio from $22 million to $1.2 billion, in addition to conducting extensive community outreach and engagement. These successes were vital in shaping what would become the nation’s largest public pension system.

During World War II, staff who left public service to join the armed forces could return to their former positions at the end of the war. Today we continue to recognize our veterans by offering the purchase of military service credit to eligible members.

Growth and Expansion

With the State Employees’ Medical and Hospital Care Act of 1962, SERS was given the responsibility of providing health benefits to eligible state employees; local public agencies would be allowed to contract for healthcare starting in 1967. Today we provide health benefits to over 1.5 million members (PDF).

Image of a group of CalPERS members in the 60s.

CalPERS team members from the early 1960s.

In 1967 SERS became the Public Employees’ Retirement System (PERS), reflecting the new broad reach and membership. During 1968, California Governor Ronald Reagan signed legislation that added annual cost-of-living increases to the System’s retirement allowances. Today our retirees typically receive an annual cost-of-living increase on the May 1 benefit payment in their second calendar year of retirement.

As investments grew, so did the organization. In 1986, PERS’ Sacramento headquarters moved into Lincoln Plaza, a six-story irregular pyramid designed for the future, with raised floors for wiring and extensive outdoor terracing that brought in natural light. The site was originally occupied by Lincoln School, and we sought to preserve and reflect the history of the neighborhood. In 2001 construction of Lincoln Plaza East and West began. The buildings were completed in 2005 and were built with sustainability in mind.

Image of Lincoln School built during the 1860s. Image Courtesy Sacramento Archives an

Image of Lincoln School built during the 1860s. Image Courtesy Sacramento Archives and Museum Collection Center.

Present Day

During the 1990s we sought to improve the financial performance of the firms in which we invested, increasing our holdings in certain firms to impact corporate responsiveness. The corporate governance program would continue to expand into what it is today.

In 1992, to distinguish ourselves from retirement systems in other states that went by the same acronym, PERS changed its name to “CalPERS.” We expanded our customer service efforts, reaching out to members through retirement planning fairs, counseling appointments, and education programs. In 1995 the CalPERS 457 Plan was launched, providing eligible members a way to ensure peace of mind in retirement through a deferred compensation plan. We also began acting as a consultant to employers, helping them with retirement policies and planning. The first Educational Forum, a three-day conference for employers, was held in 2000.

In 2011, we launched myCalPERS, an online platform for members and employers. Members can access a variety of features, from finding their account summary and health benefits to signing up for classes and scheduling appointments.

For the first time in our history, in 2022 three top leadership positions at CalPERS were simultaneously held by women. Chief Executive Officer Marcie Frost, Chief Investment Officer Nicole Musicco, and Board of Administration President Theresa Taylor are driven to usher in a new era of leadership.

Proud to Serve

Keeping our promise of a sustainable pension is the cornerstone of our mission. It has been the reason for our existence since 1932. The long-term nature of our benefits reflects our long-term investing horizon and our commitment to generations of public employees. We’ll continue to transform health care purchasing and delivery by ensuring our members have access and receive high-quality care while providing value and affordability. We’re grateful for our members and are proud to serve those who serve California.