A Solid Foundation for the Future
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)
New Asset Allocation
Adopted new strategic asset allocation effective July 1, 2018
Shortened the amortization period for employers to pay their unfunded liability
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.
$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.
December 31, 2017
in assets as of December 31, 2017
15.7% investment returns
in calendar year 2017; 11.2% in FY 2016-17
increase in assets in calendar year 2017
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.
It will take time to increase our funded status, but lowering the discount rate, adopting a new strategic asset allocation, and shortening amortization period, as well as improving efficiency and reducing operational costs, will strengthen the sustainability of the CalPERS fund for decades to come.