September 12, 2012
External Affairs Branch
Robert Udall Glazier, Deputy Executive Officer
Brad Pacheco, Chief, Office of Public Affairs
Contact: Bill Madison, Information Officer
CalPERS Approves New Long-Term Care Program Investment Discount Rate
SACRAMENTO, CA – The California Public Employees’ Retirement System (CalPERS) today agreed to lower the discount rate for its Long-Term Care (LTC) Program investment portfolio to 5.75 percent. The discount rate reflects the expected returns of the LTC Program’s investment fund.
The CalPERS Actuarial Office calculated the lower rate based on the more conservative asset allocation that the CalPERS Board adopted for the LTC Fund in April.
“The discount rate proposed by our staff is part of the restructuring for the Long-Term Care Program to ensure its stability,” said CalPERS Board President Rob Feckner. “We believe this is an appropriate rate that will ensure our investments in the program can weather the volatility of future market conditions.”
The CalPERS Long-Term Care Program began in 1995 and currently has more than 150,000 members and approximately $3.6 billion in LTC Fund assets. The LTC Program is a voluntary, self-funded, not-for-profit Program funded entirely by member premiums and the investment earnings of those premiums. The average annual premium is $2,183 and the discount rate change is expected to result in premium adjustments. CalPERS staff will present premium and plan change options to the CalPERS Board in October for their consideration.
“The proposals we will consider in October, along with the new discount rate, are proactive steps we are taking to enhance the stability of the Long-Term Care program, and that the money will be there when our participants need it,” said Priya Mathur, Chair of CalPERS Pension and Health Benefits Committee.
CalPERS is the nation’s largest public pension fund with approximately $241 billion in assets, providing retirement benefits to more than 1.6 million State, public school, and local public agency employees, retirees, and their families, and health benefits to more than 1.3 million members. The average CalPERS pension 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. For more information about CalPERS, visit www.calpers.ca.gov.