November 20, 2015

Communications & Stakeholder Relations
(916) 795-3991
Brad W. Pacheco, Deputy Executive Officer
Contact: Joe DeAnda, Information Officer

SACRAMENTO, CA - Rob Feckner, President of the California Public Employees' Retirement System (CalPERS) Board of Administration (Board), today issued a statement responding to the Governor's comments regarding the System's new risk mitigation policy:

"We respectfully disagree with Governor Jerry Brown's statement that the funding risk mitigation policy adopted this week by the CalPERS Board is 'irresponsible.' We took a bold leadership step to reduce risk and volatility in the Pension Fund to help ensure the long-term sustainability of the system and protect the public employees who serve and have served our great state.

"The policy is a measured and balanced approach that takes into account 18-months of expert analysis. It incrementally lowers the discount rate in years of good investment returns, helps pay down the Pension Fund's unfunded liability, and provides greater predictability and less volatility in contribution rates for employers. It's consistent with the state's goals of helping to pay down debt and we would hope that the Governor would have agreed it is a step in the right direction.

"A more rapid reduction of our discount rate would have caused financial strain on many of California's local municipalities who are still recovering from the financial crisis. We considered several strategies to achieve risk mitigation. Based on recommendations by external pension and investment consultants, CalPERS staff and input from stakeholders representing our members and employers we adopted a policy that begins to address the risk in our system. We believe this action demonstrates our continued leadership in the pension industry."

For more than eight decades, CalPERS has built retirement and health security for state, school, and public agency members who invest their lifework in public service. Our pension fund serves more than 1.7 million members in the CalPERS retirement system and administers benefits for more than 1.4 million members and their families in our health program, making us the largest defined-benefit public pension in the U.S. CalPERS' total fund market value currently stands at approximately $295 billion.