Acting on the discount rate, asset allocation, and amortization, CalPERS has built a solid path forward for the long-term future of the fund.

We've provided retirement security for California's public employees for more than 85 years. Through good times and bad, CalPERS has been a strong, reliable presence in our members' lives. Our $21 billion in annual benefit payments help fuel economic activity across the Golden State.

How We've Strengthened the Fund

Over the past few years, we've adopted strong measures to ensure the long-term future of the CalPERS fund so that we can pay the benefits our members have earned after a career in public service.

Lower Discount Rate

Lowered the discount rate from 7.5% to 7% over three years
(assumed rate of return)

7.5% Discount Rate lowered to 7%

New Asset Allocation

Adopted new strategic asset allocation effective July 1, 2018

Asset Allocation is 50% Global Equity, 28% Fixed Income, 13% Real Assets, 8% Private Equity, and 1% Liquidity

 

Shorter Amortization

Shortened the amortization period for employers to pay their unfunded liability

Reducing amortization period from 30 years to 20 years equals significant long-term savings

Our Members Tell Our Story

They depend on us to help them achieve a measure of financial security in retirement after a career dedicated to public service.

We partner with 2,945 employers to provide pension benefits for retirees and their beneficiaries on behalf of the state, public agencies, school districts, and special districts. Our members include public employees from across California, including peace officers, firefighters, secretaries, custodians, bus drivers, and their beneficiaries.

Pie Chart Showing CalPERS Member Demographic Percentages: Of the 1.9 million CalPERS members, 38% are school members, 31% are public agency members, and 31% are state members.

$21.4 bil. paid in pension benefits annually (FY 2016-17)

$2,876 average monthly allowance for all retirees

$3,182 average monthly allowance for members retiring in FY 2016-17

64% of all service retirees receive monthly allowance less than $3,000

3% only earn pensions greater than $100,000, typically city leaders, physicians, and university employees

Investing for the Long Term

Our bottom line is strong and getting stronger.

The numbers that measure a pension plan's health have been on the rise, and recent investment returns and cash flow improvements only strengthen our position.

Every dollar we save by reducing our operating or investments costs, or by developing simpler, more efficient processes, is another dollar we can invest toward our members' benefits.

68.0%
71.0%

Funded Status
June 30, 2017

Funded Status
June 30, 2018

Graph demonstrating CalPERS’ projected positive to neutral cash flows over the next 30 years, using estimated benefit payments to contributions and investment income.

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$351 billion
in assets as of June 30, 2018

8.6% investment returns
in FY 2017-18

$28 billion
increase in assets in FY 2017-18

1.5 - 2% reduction
in overhead costs each of the next 5 fiscal years

300+  150 reduction
in external managers

$170 million savings
in reducing investment expenses in FY 2015-16

Retirement Security Across the Decades

We opened our doors in 1932 in the middle of the Great Depression, after California voters approved creating a plan to provide retirement security to the state's public employees. Over the decades we have faced challenges and made tough decisions in the best interest of our members and the fund.

Graph showing the historical factors that impact CalPERS funded status from 1993 through 2018, including a strong economy in the 1990s, the dotcom crash, the Great Recession, the PEPRA law, and increased life expectancies.

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It will take time to increase our funded status, but lowering the discount rate, adopting a new strategic asset allocation, and shortening the amortization period, as well as improving efficiency and reducing operational costs, will strengthen the sustainability of the CalPERS fund for decades to come.