The California Employers' Pension Prefunding Trust (CEPPT) Fund is a Section 115 trust fund dedicated to prefunding employer contributions to defined benefit pension systems for eligible California public agencies. Even those not contracted with CalPERS are potentially eligible to participate.

By joining this trust fund California public agencies can help finance pension contributions in part from investment earnings provided by CalPERS.

Register for a Prefunding Programs Workshop to learn more.

Current Participating Employers

Log in to the CEPPT Online Record-Keeping System to view your daily balance, transaction history, or download quarterly and annual CEPPT statements.

Prefunding allows you to enjoy the following benefits:

  • Generate investment income from employer-controlled contributions to pay for required pension contributions
  • Reduce future employer cash flow requirements and budget dependency with investment income
  • May help employers during lean financial times to offset pension cost

As the nation's largest pension fund, we strive to offer ways for Employers to sustain retiree benefits. The CEPPT provides Employers an uncomplicated, low-cost investment and administration program, high-quality service, compliance reporting, and education about the value of prefunding pension contributions.

Benefits include:

  • All services provided at a single, low cost
  • Investment management by experts at CalPERS and internationally renowned consultants
  • No revenue sharing agreements, surrender/withdrawal/deferred sales charges, investment performance charges, or minimum fee requirement
  • Simple and straightforward administrative procedures
  • Superior customer service by a dedicated team of professionals

How it Works

The low cost of the CEPPT program yields higher shorter to medium term net investment returns. CEPPT offers two diversified asset allocation strategies. These strategies invest in four public asset classes:

  • Fixed Income
  • Global Equity
  • Global Public Real Estate Investment Trusts (REITs)
  • Treasury Inflation Protected Securities (TIPS)

For more information on the specific allocations of each asset class, see the Investment Policy for the CEPPT Fund (PDF).

Each strategy offers a distinctly different expected investment return and return volatility based on a shorter to medium term investment horizon. These strategies rely on the same underlying set of asset classes. Strategy 1 has a higher expected rate of return/return volatility. Strategy 2 has a lower expected rate of return/return volatility. You can choose the strategy that best matches the characteristics of your plan and risk preference.

Return/Return Volatility Strategy 1 Strategy 2
Expected Return Rate 5.0% 4.0%
Standard Deviation of Expected Return 8.2% 5.2%

Fees

CEPPT charges employers a single fee rate to cover all program costs. At the beginning of each fiscal year, the program budget is determined. At the same time, we project an expected average annual asset balance for the trust fund. By dividing the program budget by the average annual asset balance, we derive an average annual basis point charge rate.

This basis point charge rate is applied daily to the asset balance of each employer. Each day the investment return (positive or negative), and disbursements or contributions, are added to the employer's ending asset balance of the previous day. Then a daily basis point charge rate is applied to the employer account. The employer account ending balance of the day equals the sum of previous day ending balance plus investment return, disbursements and contributions, minus the daily basis point charge.

The fee rate is a function of both the fund operating costs and of the average asset balance of the fund. The fee rate is likely to vary over time and may be higher or lower in the future. CEPPT is a state trust fund program and retains no profit from the program. Email us to learn the current fee rate.

The annual fee rate covers the following activities:

  • Investment management
  • Trustee/custodial services
  • Record-keeping
  • Ongoing administration
  • Start-up, transfer of assets, termination
  • Legal services
  • Reporting
  • Compliance

Complete and send the following items to the CalPERS CEPPT Program:

*This Agreement and Election document must be presented to your employer's governing body and completed and adopted in a public meeting. This is the only document that must be received as a physical copy. You can email all other documents.

If mailing via U.S. Postal Service, send to:

CalPERS
Prefunding Programs
CEPPT
P.O. Box 1494
Sacramento, CA 95812-1494

If mailing via FedEx, send to:

CalPERS
Prefunding Programs
CEPPT
400 Q Street
Sacramento, CA 95811

CalPERS will process the agreement and mail you an acknowledgment letter. The letter will state the agreement has been approved and will provide an executed original copy of the agreement that includes the approval date.

For assistance with the contracting process and submission requirements, or to request forms and instructions by mail, email us.