Asset Liability Management (ALM)
The Asset Liability Management (ALM) process is an integrated review of our assets and liabilities to inform decisions designed to achieve a sound and sustainable fund.
The goal of the ALM process is to balance the expected cost of future pension payments with the expected future investment returns. During the process, the CalPERS board reviews its overall risks, taking into consideration the long-term sustainability of the system.
This formal process runs on a four-year cycle and includes a review of CalPERS’ investment portfolios and retirement plan liabilities. Liability projections are based on demographic and economic factors and trends, including membership dynamics, future salary and payroll growth, retirement ages, inflation, and life expectancy.
This transparent approach is overseen by the board and used to make sound decisions that apply to the Public Employees’ Retirement Fund (PERF) and our affiliate funds.
The decisions of the ALM process will take effect on July 1, 2026. State and school employer contribution rates will also be effective starting on July 1, 2026. Public agency employer contribution rates will go into effect one year later, on July 1, 2027.
Timeline
| Month | Action |
|---|---|
| 2024 | |
| Nov | ALM 2025 review cycle initiated: introduces framework and concepts |
| 2025 | |
| Jan | Board Education Day/Stakeholder Forum |
| Feb | ALM Strategy Session (ALM Strategy Closed Session) |
| Mar | Education Session: ALM Governance & Reporting (ALM Strategy Closed Session) |
| Apr | Education Session: Experience Study Update (Stakeholder Webinar - April 4) |
| Jun | Education Session: Active Risk (ALM Strategy Closed Session) |
| Jul | Board Offsite Education Session (Stakeholder Webinar- July 18) |
| Sep | First Reading on Recommended: Proposed Reference Portfolio, Active Risk Limits, Expected Rate of Return, Experience Study, Actuarial Assumptions, and Discount Rate (ALM Strategy Closed Session) |
| Nov |
|
| Dec | Stakeholder Webinar - December 4 |
| 2026 | |
| Mar | Affiliate Funds Final Approval |
| Jun | Affiliate Funds Implementation Plan (ALM Strategy Closed Session) |
| Jul | The Public Employees’ Retirement Fund (PERF) decisions of the ALM process will take effect on July 1, 2026 |
