By Marcie Frost, Chief Executive Officer, CalPERS
The start of a new year naturally lends itself to reflection and intention setting for what’s ahead. At CalPERS, we approach this with the needs of our 2 million members in mind. While 2023 taught us about adapting to ongoing and unpredictable change, our team is excited about the projects in 2024, and is intent on making sure your benefits remain there for you long into the future.
There are three key priorities to delivering on our promise: carefully managing the investment portfolio, accelerating our net-zero sustainability efforts, and meeting the evolving health care needs of members, while also providing the services you need from us.
Our goals are ambitious, but our commitment to our members never wavers.
Careful Assessments Are Key
CalPERS investment returns make up the largest component of every pension dollar we pay to retirees and beneficiaries. That means we need to be diligent about identifying risk and assessing opportunities that will drive strong performance. Markets are variable by nature, but our strategies are for the long term.
In 2024, we’ll take a look at the mix of assets in our more than $480 billion portfolio, working extensively with the CalPERS Board of Administration to determine if we have the right investments in place to capture market trends and pay our long-term liabilities for the next 10, 20, and 30 years.
We believe an essential part of maximizing investment returns lies in our Sustainable Investments Strategy for 2030 (PDF). This broad and expansive strategy will more than double our investments into climate solutions by the end of the decade, emphasizing the importance of addressing the global climate crisis and efforts well under way to finance the transition to a low-carbon economy.
Addressing Climate Risk
There is a direct connection to the stability of member benefits and our investment actions directed toward climate change. It’s not a matter of if — but how soon — clean and renewable energy plans are fully realized. We can either take advantage of the investment opportunities this represents, or risk missing out on opportunities that have long-term potential to pay member benefits.
Some critics have suggested our strategy doesn’t go far enough. We addressed that head on in an article detailing the urgency of the climate crisis and our focus on three broad categories of new investment strategies: transition, adaptation, and mitigation. The 2030 strategy not only mitigates against risk, it also strives to achieve investment returns above and beyond our assumed targets. Through the process, the portfolio will become more resilient to impending market conditions related to a just energy transition.
Health Care You Can Count On
When it comes to our members’ health benefits, we are focused on ensuring you have high-quality, affordable, and equitable care when and where you need it.
While we continually seek ways to lower health care costs, we’re also intensely focused on improving health outcomes, improving access to behavioral health services, and reducing health disparities. Through our collaboration with Covered California and the Department of Health Care Services, we’re working together to advocate for better health care for our 1.5 million members, as well as the 14 million Californians our organizations collectively represent.
Come what may for 2024, we’re ready to deliver the retirement and health benefits you’ve come to rely on — just as we have for more than 90 years since CalPERS was established.
Wishing you and yours a very Happy New Year.