A recording of all the public meetings has now posted to the CalPERS YouTube Channel. Here are some highlights from this month’s meetings.
The board approved the Capital Market Assumptions (CMAs) that will serve as the baseline economic scenarios for our asset classes as part of our Asset Liability Management (ALM) work.
The board also heard a presentation on several candidate portfolios (PDF) for the Public Employees’ Retirement Fund (PERF). Feedback from this discussion will be considered in the options and recommendation presented in November.
In addition, team members presented the Annual Trust Level and Program Reviews (PDF). This presentation updated board members on the performance, priorities, and major initiatives of each asset class within the Investment Office.
Review of Actuarial Assumptions for the PERF
The actuarial team presented the updated actuarial assumptions to the board that includes the experience study results. The study looked at the actual experience of CalPERS members from 2000 to 2019 and found that life expectancy of healthy members at age 55 increased slightly from the last study released in 2017.
Specifically, the study showed that men are expected to live roughly eight months longer and women approximately five months longer since the previous study. For example, a male age 55 is now expected to live to 85 years, while a female is expected to live to 87.3 years.
The study also showed higher rates of retirement for certain member groups, including the California Highway Patrol and other safety members. The study also found lower retirement rates for miscellaneous members.
These new assumptions will impact employer pension costs in Fiscal Year 2022-23 for state and schools plans, and FY 2023-24 for public agencies. Cost impacts for most groups (PDF) will be relatively minor.
The board will hear a second reading of the new demographic assumptions at the November board meeting. Read the experience study (PDF), the agenda item (PDF), and view the presentation (PDF) for more information.
Revised Contribution Rates Released for State Plans
The board adopted the revised state employer contribution rates for Fiscal Year 2021-22.
In April 2021, the board adopted employer contribution rates for state plans, but they have now been revised to reflect a change to certain member rates. Due to collective bargaining, member contribution rates increased in bargaining units 5 and 9 that are effective July 1, 2021. These changes affect the employer contribution rates and require board approval. Review the revised rates (PDF) to learn more.
Long-Term Care Valuation
The board received the valuation for the Long-Term Care Program for Fiscal Year 2019-20.
As of June 30, 2020, the program’s funded status is 101% and the margin is positive 1.34%. The valuation report reflects program stabilization efforts including an asset allocation change and two-phase rate increase approved by the board in November 2020.
Chief Executive Officer’s Briefing on Performance, Employment, and Personnel Items
On Wednesday, CalPERS CEO Marcie Frost provided updates on the return to office plans and a recap of the successful Pathways for Women inaugural event. A presentation was also given by Legislative Affairs Division Chief Danny Brown updating the board on state and federal legislative issues affecting CalPERS.
Next Board Meeting
There are no meetings scheduled in October. The board will meet again November 15-17 and the meeting will be livestreamed.