CalPERS

The California Public Employees' Retirement System, branded as CalPERS, is an agency in the California executive branch that "manages pension and health benefits for more than 1.5 million California public employees, retirees, and their families". In fiscal year 2020–21, CalPERS paid over $27.4 billion in retirement benefits, and over $9.74 billion in health benefits.

CalPERS manages the largest public pension fund in the United States, with more than $469 billion in assets under management as of June 30, 2021. CalPERS is known for its shareholder activism; stocks placed on its "Focus List" may perform better than other stocks, which has given rise to the term "CalPERS effect". Outside the U.S., CalPERS has been called "a recognized global leader in the investment industry", and "one of America's most powerful shareholder bodies".

As of 2018, the agency has $360 billion in assets, and is underfunded by an estimated $150 billion, with current assets below 70% of necessary to provide for liabilities. In an effort to reduce this shortfall, at the end of 2016 the board lowered their expected annual rate of return on investments from 7.5% to 7.0%, increasing the costs California cities must pay toward their workers' pensions.

Statistics on pension payouts, 2018

Total payout = $22 billion
Total beneficiaries = 600,000
Overall average = $32,224 - (including payments to survivors and workers with only a few years of service)
20+ years of service average = $50,333
30+ years of service average = $66,373
Police or Firefighters with 20+ years of service average = $78,104
Number of retirees with $100,000+ pension = 26,000 (This is 4% of the total number of retirees, yet this group collected 17% of the total amount CalPERS paid out in 2018.)

For comparison:

Average Social Security payout = $17,532

History

Discussion about providing for the retirement of California state employees began in 1921, but only in 1930 did California voters approve an amendment to the State Constitution to allow pensions to be paid to state workers, and only in 1931 was state law passed to establish a state worker retirement plan. In 1932, the "State Employees' Retirement System" (SERS) began operation. The California State Employees Association, established in 1931, began a close relationship with SERS that continues to this day. The building, which has , is known for its six-story-high atrium and landscaped terraces. In July 1991, Governor Pete Wilson addressed the state's $14.3 billion budget deficit by removing $1.6 billion from the pension fund. Wilson further sought to give the governor's office control of the PERS’ actuarial projections and the appointment of a majority of its board of directors.

To avoid confusion with public employees' retirement systems in other states, the organization's name was changed to "CalPERS" in 1992. The architecture of the buildings, which received praise, includes an entry tower high in a shape reminiscent of a tree which is made of steel covered with glass.

Governor Jerry Brown

In 2012, Governor Jerry Brown signed legislation that reduced benefits for all new state employees and sought to combat pension spiking. Legislators rejected Governor Brown's proposals to include a 401(k) type defined contribution plan and to require CalPERS Board members to be independent, not themselves pensioners. Blackstone Group LP announced in November 2015 that it would acquire 43 international and domestic real estate funds from CalPERS for $3 billion.

In 2015, Kevin de León, who was the California State Senate majority leader at the time, introduced legislation to require CalPERS and CalSTRS divest from coal and the California Democratic Party passed a resolution in support of fossil fuel divestment. The bill was passed and, effective June 1, 2017, CalPERS was prohibited from maintaining holdings in companies that receive at least half of their revenue from thermal coal.

In 2016, CalPERS fund value reached $295.1 billion. Unfunded retiree healthcare costs add an additional $125 billion to California's public retirement debt. On February 17, 2022, State Senator Lena Gonzalez introduced legislation that would require CalPERS and CalSTRS divest. The CalPERS board has opposed proposals to divest. The bill passed the state senate on May 25 but was halted in the assembly by Jim Cooper.

Governance

Law

The legal authority for the activities of CalPERS can be found in the constitution, laws, and regulations of the state of California, including:

California Constitution, Article XVI, Section 17, under which (as amended by Proposition 162) "the retirement board of a public pension or retirement system shall have plenary authority and fiduciary responsibility for investment of moneys and administration of the system".
California Government Code, Title 2, Division 5, Parts 3-8 (i.e., Sections 20000–22970.89). Among other parts, Part 3 covers the administration of the retirement system including membership, contributions, and benefits; and Part 5 covers the Public Employees' Medical and Hospital Care Act on health benefits.
California Code of Regulations, Title 2, Division 1, Chapter 2, Sections 550–559.554.

Board of Administration

CalPERS is overseen by a 13-member Board of Administration whose members are elected, appointed, or ex officio:

Six are elected from CalPERS members (two by all CalPERS members, one by active State members, one by active CalPERS school members, one by active CalPERS public agency members, and one by retired members of CalPERS)
Three are appointed (two by the Governor, one by specified leaders of the Legislature)
Four are ex officio (California State Treasurer, California State Controller, Director of the California Department of Human Resources, and designee of the California State Personnel Board)

Notable past Board members have included Caspar Weinberger (1967–1969), Jesse Unruh (1983–1987), Gray Davis (1986–1994), Matt Fong (1995–1998), Kathleen Connell (1995–2003), Phil Angelides (1999–2006), Willie Brown (2000–2005), and Steve Westly (2003–2006).

Controversies

Between 1999 and 2001, several conflicts among Board members were notable:

In 1999, after Board member Phil Angelides (also state treasurer) criticized a statement in a report, Board chairman Charles Valdes said about Angelides "What we have here is a Greek treasurer who doesn't like Turkey, the country; who doesn't like Turks, who is trying to … drive our policy according to those ethnic hatreds". Angelides responded that he was "do[ing] what is best for the state".
Board member Kathleen Connell (also state controller) sued CalPERS in January 2001 to limit its investment managers' pay. Although CalPERS argued that the higher salaries were necessary to compete for qualified investment managers and that CalPERS had the authority under Proposition 162 to issue the higher salaries,
Articles in 2002–03 issues of BusinessWeek and The Wall Street Journal noted cronyism and conflicts of interest among Board members.
A president of the Board, Sean Harrigan, was removed from his position in December 2004 amid criticism for his activism on matters of corporate governance. He claimed his removal was politically motivated.
In September 2014, California's State controller, John Chiang criticized the fund for "passive" approach towards pension spiking - a practice of inflating workers' benefits just before retirement in order to boost their pensions- and failing to adequately review payroll data, inviting abuse.

Executives

CalPERS employees perform under the direction of the chief executive officer (CEO) of CalPERS. Past CEOs have been: Richard H. Koppes (interim, 1994); James E. Burton (1994–2002); Robert D. Walton (interim, 2002); Fred R. Buenrostro, Jr. (2002–2008); Kenneth W. Marzion (interim, 2008–2009); Anne Stausboll (2009–June 2016); and Marcie Frost (October 2016 – Present).

Reporting to the CEO, the executive officers of CalPERS are: deputy executive officers for customer services and support, health benefit programs, policy and planning, operations and technology, and external affairs; a general counsel; a chief actuary; and a chief financial officer; a chief information officer; a chief risk officer; and a chief investment officer. Under the executive officers, CalPERS employees work in 23 major branches, divisions, and offices. Approximately $415.1 million is budgeted in 2014-2015 for administrative functions in CalPERS, such as paying the salaries of 2,700 CalPERS employees.

The next four years were a period of investment income stability; a 24 billion investment income in 2004, 22 billion in 2005, 21 billion in 2006, and 41 billion in 2007. This four-year period had a cumulative investment income of $108 billion, or $27 billion a year.

With the stock market decline during the 2008 financial crisis, there were large investment income losses. There was a 12 billion dollar investment income loss in 2008 and 55 billion in 2009.

In 2010 CalPERS revised its strategic asset allocation mix using its Asset Liability Management process. By the end of the fiscal year ended June 30, 2013, CalPERS had a total of $257.9 billion in assets invested as follows: $166.3 billion (64 percent) in equities, $40.2 billion (16 percent) in fixed income, $25.8 billion (10 percent) in real assets, $10.6 billion (4 percent) in cash equivalents, $9.2 billion (4 percent) in inflation-linked assets, $5.2 billion (2 percent) in hedge funds, and $0.5 billion (0.0 percent) in multi-asset class and other. and especially in the early 1990s under the pioneering leadership of CEO Dale Hanson, CalPERS has used its influence as one of the largest shareholders in the world to change the way certain things are done in business. It is especially known for its shareholder activism concerning corporate governance, in which it has been described as the most influential pension fund

Among other examples of its shareholder activism, CalPERS has:

Lobbied the board of General Motors (GM) "to take a more active role in monitoring the company, which may have been a factor in the GM board's ousting chairman Robert Stempel in 1992.
Starting in 2000, "screen[ed] all its investments in emerging markets for compliance with a number of human rights, environmental and labor standards".
As of 2002, called on companies which operate in offshore havens to repatriate to the United States.
With other pension funds, on September 16, 2003, called upon Richard Grasso to resign from the NYSE because of an exorbitant pay package; he resigned the next day.
In 2003, sued the NYSE and seven specialist firms over allegations that the firms' floor workers engage in practices which hurt investors. The firms "settled with the Securities and Exchange Commission in 2005 and paid more than $240 million in fines without admitting or denying guilt". The part of CalPERS' lawsuit aimed at the NYSE itself was later thrown out of court, and in 2008 the U.S. Supreme Court declined to reinstate that part of the lawsuit.
In 2004, with other parties, opposed Michael Eisner as chairman of the board and CEO of The Walt Disney Company; Eisner was removed as chairman of the board and in 2005 resigned as CEO.
In 2006, banned investment of its funds in nine companies that do business in Sudan until the government of that country halts ongoing genocide; however, that decision was described as "a largely symbolic gesture" because CalPERS "did not own a stake in any of the nine".
From September 2006 through July, participated as lead plaintiff in a successful class-action lawsuit against UnitedHealth Group for options backdating. CalPERS had held "6.6 million shares of UnitedHealth stock valued at $360 million".
With other institutional investors, requested in 2007 that the government "set national, mandatory standards to cut greenhouse gas emissions".
At Apple in 2013, CalPERS voted for a management proposal to implement majority voting for director elections and other proposals designed to enhance shareowner rights. This was a result of more than two years of engagement with Apple to change its voting standard for board candidates from a plurality model to a majority standard. Following successful CalPERS-sponsored shareowner resolutions supporting majority voting, in February 2013 Apple sponsored Proposal 2, which would amend Apple's charter to provide for majority voting for directors.
At Nabors Industries in 2013 CalPERS sponsored a proposal to amend the company's by-laws to require shareowner approval of severance benefits that exceed 2.99 times the sum of an executive's base salary and bonus. CalPERS also voted for a proposal asking the board to elect an independent chair and for a proposal allowing shareowners to nominate candidates for election to the board.
CalPERS is among the signatories of the "Principles for a Responsible Civilian Firearms Industry," which seeks to engage firearms manufacturers, dealers, and retailers in promoting gun safety.

CalPERS has received some criticism for its shareholder activism:

As of 2002, there was a concern that CalPERS' activism had distracted from "its effectiveness as a corporate watchdog and its ability to provide for the 1.3 million public employees whose pensions it guarantees".
CalPERS votes against some companies' directors "whose sins are exceedingly small," such as "attendance gaps or minor conflicts".
Businesses describe CalPERS as having a "pro-labor agenda",

The Focus List and the "CalPERS effect"

Beginning in 1987, CalPERS placed certain companies, with which it had "concerns about stock and financial underperformance and corporate governance practices" on a "Focus List". The list was also referred to as a "name and shame" list. Beginning in 2010, CalPERS stopped publicly naming companies on the list and instead began dealing with such companies privately. In 2012, CalPERS initiated a program to monetize the Focus List. Each year, after the Board approves staff recommendations for Focus List companies, CalPERS increases investments in those companies. New Focus List companies are added to the portfolio each year, and the portfolio is rebalanced so that holdings remain equally weighted. The purpose of monetizing the Focus List is to replicate the Wilshire studies—using actual funds to demonstrate and measure the "CalPERS Effect." Monetizing the Focus List also allows CalPERS to realize a return on the increased value that typically occurs following an engagement. In 2014, a study by Wilshire Associates showed the companies engaged by CalPERS significantly outperformed the Russell 1000. The term has been used in the newsmedia. Whether a "CalPERS effect" actually exists has been studied in a number of subsequent papers, including:

Michael P. Smith (1996) determined that shareholder wealth increased for companies that adopted changes proposed by CalPERS or made changes that resulting in reaching a settlement with CalPERS; however, shareholder wealth decreased for companies that resisted CalPERS' proposals.
Wahal (1996) analyzed the efficacy of pension-fund activism for CalPERS and eight other funds such as TIAA-CREF. Of the firms targeted by the nine funds, "only firms targeted by Calpers experience[d] a positive stock price reaction".
Two studies published by CalPERS staff (i.e., Anson et al.) in 2003-2004 found that stocks on the CalPERS Focus List experience "positive excess stock returns of about 12% over the three months following release of the list" and "an average one-year cumulative excess return of 59.4 per cent".
English et al. (2004) concluded that CalPERS targeting produces a statistically significant improvement in short-term returns but not necessarily in long-term returns (depending on the specific methods used to calculate long-term returns).
Nelson (2006) claimed that his study addressed problems in the methodologies of previous studies (e.g., by controlling for the "contaminating events" of The Wall Street Journal articles appearing just before or just after the dates that CalPERS released Focus List information). He found "no evidence to support the persistence of a 'CalPERS effect'" after 1993. In contrast, although the long-term returns of companies "are uniformly positive and economically large" after being placed on the CalPERS Focus List, due to market volatility he could not conclude that the long-term returns were unusual. Barber's paper won a 2006 prize for best study in the area of socially responsible investing from the Haas School of Business.
Junkin and Toth (2008), in an update of Nesbitt's 1994 study, found that the "CalPERS effect" was still present in that "the average targeted company produced excess returns of 15.7% above their respective benchmark return on a cumulative basis," but that the effect had decreased over time.

Notable investments

The agency both lost and gained from investments in Enron (which went bankrupt in 2001) and its affiliated companies. Its losses included common stock worth $40 million; "stock in a different portfolio, some bonds and a separate investment in New Power Co." worth $100 million; and $4 million from the liquidation of Enron's JEDI II project (i.e., CalPERS had paid $175 million for its stake but received only $171 million in return). However, as CalPERS had earned $132.5 million from the sale of its stake in Enron's JEDI I project to Enron's Chewco project, it later denied that it could have taken actions to prevent Enron's downfall. Nevertheless, as a result of the Enron experience, in 2002 the CalPERS board did resolve to improve accounting and auditing standards among companies in which it invests.
In June 2000, CalPERS announced that it would invest $500 million in biotech as part of its California Biotechnology Program. Ultimately, $235 million went to California-base venture capital firms specializing in the biotech sector.
In 2002, the Republican Party questioned CalPERS' investing $100 million in a firm that was co-founded by a Democratic supporter. CalPERS denied any political influence in its investment decision. Phil Angelides denied that CalPERS made its decision because of the donations. In 2004, a consultant's recommendation to remove the Philippines from the "approved" list "contributed to a 3.3% drop... in the $55-billion Manila stock market". and for not publicly addressing the issue.
In June 2008, after Los Angeles-area property developer LandSource filed for bankruptcy protection, CalPERS was criticized for having invested $947 million in LandSource in 2007; a CalPERS spokesperson described the investment as "small" relative to CalPERS' total assets.
As of 2021, CalPERS has invested about $30 billion in fossil fuels, which has been criticized by environmentalists.
CalPERS retirement benefits payments. Prepared by California State University, Sacramento, and released in April 2007, this study found that the direct payments of $7.7 billion in 2006 led to a total impact (including "the ripple effect of business and government revenues as spending from... benefit checks works its way through the economy") of $11.8 billion.
CalPERS investments. Prepared by California State University, Sacramento, and released in September 2007, this study found that the direct investments of $8.3 billion in 2006 led to a total impact of $15.1 billion.
CalPERS health care benefits payments. Prepared by Lincoln Crow Benefits Research Group and released in April 2008, this study found that the direct payments of $4.2 billion in 2006 led to a total impact of $7.6 billion.

Key findings of the CalPERS Economic Impacts in California Report for the fiscal year ending June 30, 2012, included:

CalPERS benefits (retirees spending their pensions) returned $10.85 in economic activity to California for each taxpayer dollar (public funds) contributed to the system.
The total economic revenue generated by CalPERS benefits was more than $30.4 billion.
CalPERS benefits created 113,664 jobs throughout California.
Investments in California accounted for $20.7 billion, or approximately 8.9 percent, of the CalPERS portfolio.
The CalPERS investment portfolio, which included public and private equities, real estate, fixed income, and infrastructure, supported 1.5 million jobs.

CalPERS touted the studies as demonstrating the value of the agency with news releases such as "CalPERS and CalSTRS Pensions Power Up State and Local Economies". The studies and their use by CalPERS were criticized as follows:

A reporter summarized the opinion of the lead author of the first study as "his study was never intended as any sort of implied commentary on the wisdom of CalPERS' policies".
If the money that CalPERS paid in benefits were returned to taxpayers, the money would be spent and would therefore still cause "ripple effects". conducts employee surveys every two years, offers a training and wellness program, and administers a nationally known employee recognition program. The program includes a river rock that is passed around to employees who are "rock solid," rock-shaped notes with appreciative sentiments written on them, and rock-themed e-cards.
The quarterly ACE (Achieving Communication Excellence) award, consisting of a lapel pin and an informal celebration.
A formal annual recognition called APEX (Achieving Performance Excellence), with a crystal trophy, a cash award, and a luncheon.

Two CalPERS employees received 2000 National Association for Employee Recognition (NAER) Recognition Champion Awards for the employee recognition program. In addition, CalPERS itself won a 2002 Best Practices award from NAER.

With the passage of Assembly Bill 340 (AB 340), the pension reform legislation by the California Legislature, CalPERS members hired after January 1, 2013, are expected to pay 50 percent of the Total Normal Cost of the benefit plan in which they participate. however, the rates can increase if CalPERS' investments perform unfavorably and decrease if CalPERS' investments perform favorably. According to CalPERS, "The School Pool contribution rate is affected by the investment return of a given fiscal year in the second year that follows" and "Local public agency contribution rates are affected by the investment return of a given fiscal year in the third fiscal year that follows". CalPERS' earnings and losses are averaged over 15 years to prevent extreme changes in employers' contribution rates. Nevertheless, in 2008 "CalPERS warned that it might ask for more money from the state starting in July 2010 and from local-government employers starting in July 2011" if CalPERS' investments are performing poorly as of June 30, 2009. However, if an employer seeks to leave CalPERS, it will be required to immediately payoff the undisclosed current market value of the unfunded liabilities, which only assumes 2.56% growth.

Benefits

CalPERS provides benefits to all state government employees and, by contract, to local agency and school employees. CalPERS administers the following categories of benefits to members:

Retirement benefits under defined benefit plans
Deferred compensation and other supplemental income plans
Disability retirement and industrial disability retirement
Death benefits
Health benefits
Long-term care benefits

Retirement benefits under defined benefit plans

As of 2020, CalPERS paid monthly allowances to 732,529 retirees, survivors, and beneficiaries.

In addition, CalPERS administers the Legislators' Retirement System, Judges' Retirement System, and Judges' Retirement System II.

At least 6 cities (Concord, Fresno, Los Angeles, San Diego, San Francisco [also a county], and San Jose)
The California State Teachers' Retirement System (CalSTRS)

CalPERS has reciprocity agreements with many of these California public retirement systems that allow retirees with service credit and contributions in two systems to receive payments from both systems.

Some people prefer defined contribution plans to CalPERS' defined benefit plan. For example:

In 1996, Howard Kaloogian sponsored a bill in the State Assembly to allow state employees to choose between CalPERS' defined benefit plan and a defined contribution plan; the bill failed in a State Senate committee.
In early 2005, Governor Arnold Schwarzenegger proposed a ballot initiative to require new public employees to join a 401(k)-like plan, but dropped the proposal after opposition to a provision in the initiative to "reduce benefits for widows of officers and firefighters killed in the line of duty".
In November 2008, the voters of the city of Pacific Grove passed an advisory measure to leave CalPERS in favor of a defined contribution plan.

Among other arguments, CalPERS claims that defined contribution plans cost more to manage than defined benefit plans and fail to provide adequate funds to retirees.

Deferred compensation and other supplemental income plans

CalPERS is responsible for a deferred compensation retirement plan (457 plan) and two other plans to supplement income after retirement or permanent separation from State employment. As of December 2014: The specific benefits vary by employer, by the contract between CalPERS and the employer, and by the employee's occupation.

Some non-disabled persons fraudulently claim industrial disability retirement, such as "a 'disabled' highway patrol officer riding in a rodeo." Unfortunately, "state law forbids Calpers from requiring disabled retirees who are 50 or older to submit to another medical evaluation, even if there is evidence of possible fraud".
"A series of bills that expanded eligibility for these medical pensions - and made it easier to get them" increased costs for state and local governments.
The list of "disabilities automatically presumed to be job-related for public-safety workers" has grown to include diseases and conditions that may or may not be caused by employment, such as lower back pain, heart disease, cancer, syphilis, HIV, and mad cow disease.
Retirees can receive two safety disability retirements for the same condition if they are covered by two separate pension systems.
Because California law prevents light-duty assignments in the California Highway Patrol, some officers are "forced to retire against their will."

Second, "a 1980 state law that tied public safety officers' disability benefits to the age at which they were hired" caused an age discrimination complaint with the Equal Employment Opportunity Commission (EEOC) in 1992 which eventually led to a 1995 class action lawsuit against CalPERS and other state and local agencies. In January 2003, CalPERS settled the suit by agreeing to pay $50 million in retroactive benefits and $200 million in future benefits to 1,700 officers; the settlement "was by far the largest in the EEOC's history". The benefits can include one-time payments and/or monthly payments, but "depend on the member's age, years of service, job classification, employer's contract with CalPERS, eligible beneficiary, date of separation from employment, and whether or not they were eligible to retire at the time of death".

California Employers’ Retiree Benefit Trust Fund

The California Employers’ Retiree Benefit Trust Fund was established by CalPERS in March 2007 to provide California public agencies with a cost-efficient, professionally managed investment vehicle for prefunding other post-employment benefits (OPEB) such as retiree health benefits. Prefunding reduces an agency's long-term OPEB liability. Participating agencies can use investment earnings to pay future OPEB liabilities, similar to the CalPERS pension fund in which three out of four dollars paid in retirement benefits come from investment earnings. As of 1994–1995, CalPERS contracted with 24 health plans for its "over 900,000" members and was able to reduce health insurance premiums by 1% compared with 1993–1994. At the time CalPERS was "called a model for the so-called health alliances" proposed in the 1993 Clinton health care plan. CalPERS attracted national attention again in the mid-2000s, this time for health maintenance organization rate increases of 25% in 2004 and 18% in 2005. Meanwhile, the number of participating plans dropped to seven as of 2003,

A 2006 study by the Government Accountability Office determined that from 1997 through 2002 the average annual growth in CalPERS premiums (6.5%) was lower than that of the Federal Employees Health Benefits Program (FEHBP, 8.5%) and of other surveyed employer-sponsored health benefit programs (7.1%); however, between 2003 and 2006–7, the average annual growth rate in CalPERS premiums (14.2%) was higher than that of FEHBP (7.3%) and of other surveyed employer-sponsored health benefit programs (10.5%). As of 2008, CalPERS eliminated copayments for preventive care visits, raised copayments for other types of office visits, and took other measures in an attempt to reduce costs.

In 2010, Blue Shield of California, Dignity Health, and Hill Physicians Medical Group initiated an integrated health management program (similar to an Accountable Care Organization) that covered 41,000 CalPERS members.

In 2019, CalPERS provided more than $9.2 billion in health benefits for 1.5 million active and retired state, public agency, and school workers and their dependents.

68% are enrolled in health maintenance organization plans administered by Blue Shield of California and by Kaiser Permanente.
25% are enrolled in preferred provider organization plans called "PERS Select," "PERSCare," and "PERS Choice," which are administered by Anthem Blue Cross (the California subsidiary of WellPoint).
7% are enrolled in "association" plans for the California Correctional Peace Officers Association, the California Association of Highway Patrolmen, and the Peace Officers Research Association of California.

Long-term care benefits

California's "Public Employees' Long-Term Care Act," as passed in 1990 and amended in 1996, led to CalPERS' administering a Long-Term Care Program for "California public employees and retirees, as well as their spouses, parents, parents-in-law, adult children and adult siblings between the ages of 18 and 79." Described as the "largest self-funded program of its kind",

The program is funded by participant premiums and by proceeds from investments in the CalPERS Long-Term Care Fund. During an economic downturn in 2002, premiums for the program rose an average of 9% and investment losses were $99 million.

Unfunded Liabilities Crisis

CalPERS faces significant unfunded liabilities which is likely to challenge its long-term financial stability. Official estimates place the liabilities at approximately $150 billion, an increase from $22 billion in 2002. The unfunded liabilities figure is a projection that takes into account returns on CalPERS investments. The $150 billion figure is based on a long term return of 7%; if the returns are higher, the true liability is much smaller, but if returns are lower than the liabilities are much larger. CalPERS itself projects that it will return 6.1% over the next decade and 8.3% for the decade after that. the most recent year with no unfunded liabilities was FY 2007.

Criticisms

CalPERS has received criticism for the number of retirees (26,000 in 2018) who collect over $100,000 a year in pension. That group of people, while less than 4 percent of the total number of retirees receiving benefits from CalPERS, collect 17 percent of the total yearly pension payouts.

References

External links

Board of Administration of Public Employees' Retirement System in the California Code of Regulations
CalPERS Shareowner Forum
CalPERS Investor Profile SWFI