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CalPERS Perspective: Focus on the Future Marcie Frost, CalPERS CEO Michael Cohen, CalPERS CFO Fritzie Archuleta, CalPERS Deputy Chief Actuary
California Society of Municipal Finance Officers Annual Conference | January 9, 2019
68.0%
Funded Status June 30, 2017
71.0%
Funded Status June 30, 2018
7.5%
7%
Lower Discount Rate Lowered the discount rate from
7.5% to 7% over three years (assumed rate of return)
30 yrs. 20 yrs. =
significant long-term savings
Shorter Amortization Shortened the amortization period
for employers to pay their unfunded liability
New Asset Allocation Adopted new strategic asset
allocation effective July 1, 2018
Michael Cohen Chief Financial Officer
Ben Meng Chief Investment Officer
of Public Agencies are current on their pension obligations as of December 2018
98%
7
Options for Accelerating the Funding of the Plan
Ad Hoc Additional Discretionary
Payments (ADPs)
Fresh Start Full or partial
IRS Section 115
Trusts
Sample City $11m Additional Payment
$0
$2
$4
$6
$8
$10
$12
2019 2022 2025 2028 2031 2034 2037 2040 2043 2046
Mill
ions
Safety Plans
Safety Police
Safety Fire (Before Additional Payment)
Safety Fire (After Additional Payment)
$27 billion invested Private Equity
16.1% 2017-18 fiscal-year return
10.5% 20-year return
As of June 30, 2018
Innovation Late stage venture capital investments in bio-tech, life sciences & health care
Horizon Long-term investments in core economy established companies
Proposed Private Equity Investment Models
11
Focus on Total Fund Return
Engagement vs. Divestment
Partnerships Funding Tools Investments
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