September 12, 2012
External Affairs Branch
Robert Udall Glazier, Deputy Executive Officer
Brad Pacheco, Chief, Office of Public Affairs
CalPERS Posts Savings in Contract Expenses
Business savings on track to meet June 2014 target reductions
SACRAMENTO, CA – Fiscal responsibility and the goal of providing retirement and health security to members and employers are driving CalPERS efforts to reduce enterprise consulting and professional service expenses by 5 percent each fiscal year.
CalPERS is expected to save more than $657,000 on its contract expenses this fiscal year based on voluntary reductions by some of the pension fund’s vendors.
Between July 27 and August 2, CalPERS sent out 636 letters to its Consulting Vendor Partners requesting their help in achieving the goal of reducing contract expenditures by 5 percent. Those vendors that are in a pool, but do not currently have a Statement of Work or Letter of Engagement, were asked to reduce their hourly wage by 5 percent for any future engagements. The responses were due back on August 20.
“I am pleased to report today that 75 of our vendors stepped up to the plate by reducing their fees five percent or more,” said Anne Stausboll, Chief Executive Officer of CalPERS. “Our vendors and consultants truly are our long-term partners as we strive to meet business and operational priorities and I commend them for their efforts,” Stausboll added.
Expenses have steadily declined in recent years for contracts valued at more than $100,000. The fund had 144 of these larger contract relationships in fiscal year 2009-10 and paid approximately $299 million for services. At the close of the most recent fiscal year, CalPERS contracts of $100,000 or more shrank to 119 vendors and $262 million in fees.
CalPERS, with approximately $237 billion in assets, is the largest public pension fund in the U.S. It administers retirement benefits for more than 1.6 million active and retired California state, public school, and local public agency employees and their families on behalf of more than 3,000 public employers; and health benefits for more than 1.3 million enrollees. The average CalPERS pension benefit is $2,332 per month. The average benefit for those who retired in the fiscal year that ended June 30, 2011, is $3,065 per month. More information about CalPERS is available at www.calpers.ca.gov.