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CalPERS July 2020 Board Meeting Recap

CalPERS Board Meeting Recap

The CalPERS Board met from Monday, July 13, through Wednesday, July 15, via livestream as all board members and presenters participated from their respective remote locations.

A recording of all the public meetings has now posted to the CalPERS YouTube Channel.

Here are some highlights from this month’s meetings.

Monday’s Meeting

As is the case with July Investment Committee meetings, the board had numerous educational sessions on various investment topics. These presentations were delivered by both CalPERS team members and industry leaders.

Topics included a presentation on human capital management, sessions on both public and private equity, and presentations on capital market assumptions.

Tuesday’s Meeting

The board approved the health plan premiums for 2021, at an overall average increase of 4.32%.

Basic (non-Medicare) Health Maintenance Organization (HMO) health plans will have an average premium increase of 4.44%. The Basic Preferred Provider Organization (PPO) plans will have an overall average increase of 8.54%. Medicare HMO and PPO plans will see premiums decrease by 4.46% and 0.65%, respectively.

Rates for CalPERS Medicare plans are declining across the board from the previous year.

Included in the approved rates are the addition of a new health plan, coverage area expansions, and benefit design enhancements for specific plans.

Check out CalPERS Announces Health Plan Premiums for 2021 for detailed information on the 2021 health plan premiums including: The coverage area expansions, individual plan increases, and Medicare rates decreases.

In addition, enrollment in the CalPERS Long-Term Care Program is temporarily suspended due to current uncertainty in the long-term care market. Effective June 17, 2020 and until further notice, the program will not be accepting new applications for coverage. Applications that were in underwriting on June 17, 2020 were not processed.

Wednesday’s Meeting

The board heard the preliminary investment returns for Fiscal Year 2019-20 to kick off the meeting: A 4.7% net return on investments for the 12-month period that ended June 30, 2020 and CalPERS assets at the end of the fiscal year stood at more than $389 billion.

Individual asset class returns included Fixed Income, which generated a 12.5% net return, followed by Real Assets and Public Equity net returns of 4.6% and 0.6%, respectively. Despite significant market volatility which included assets under management declining by an estimated $70 billion in late February and March, the CalPERS Public Employee Retirement Fund (PERF) was able to recover nearly all of that value by the end of June.

Based on these preliminary fiscal year returns, the funded status of the overall PERF is an estimated 70.8%. This estimate is based on a 7% discount rate.

For more information, view CalPERS Reports Preliminary 4.7% Investment Return for Fiscal Year 2019-20.

Next Board Meeting

The next board meeting occurs September 14-16 and will be livestreamed on our website.