CalPERS Wins Government Finance Award For Sustainable Pension Policy
Posted On: May 25, 2016
Funding Risk Mitigation Policy Designed in Step with State Goals
SACRAMENTO, CA - The California Public Employees' Retirement System (CalPERS) was recognized for its pension sustainability efforts by the Government Finance Officers Association (GFOA), which presented CalPERS with an Award for Excellence in Government Finance. CalPERS won the award for its Funding Risk Mitigation Policy, which emphasizes improving the Fund's long-term sustainability through the reduction of investment risk. CalPERS was one of two GFOA award winners from a field of 14.
"This award serves as a reminder of CalPERS' commitment to excellence and innovation," said Anne Stausboll, CalPERS Chief Executive Officer. "The Funding Risk Mitigation Policy is an essential component of our long-term strategy to improve pension security for the benefit of our members and the people they serve."
CalPERS' Funding Risk Mitigation Policy employs asset liability management principles to increase pension stability. The policy calls for lowering the Fund's assumed rate of return in years that investment performance exceeds expectations, along with a corresponding adjustment of investment asset allocations. The strategy aims to produce steadier investment returns to reduce Fund volatility and provide greater consistency in contribution rates for CalPERS contracted employers. The policy was adopted by the CalPERS Board of Administration in November 2015 after an 18-month period of analysis and stakeholder input.
"It's a great honor for this new policy to be recognized by the GFOA," said Cheryl Eason, CalPERS Chief Financial Officer. "Our policy team consisted of actuarial, financial, and investment staff, who all deserve recognition for their work."
The GFOA annually presents Awards for Excellence in Government Finance in recognition of program contributions to the practice of government finance that exemplify outstanding financial management. Awards are presented each year to select applicants in any of six governmental finance categories.
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 1.8 million members in the CalPERS retirement system and administers benefits for nearly 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 $290 billion. For more information, visit www.calpers.ca.gov.