CalPERS: Amortization Schedule, Divestment Mandates
January 11, 2018
Several important updates come from the California Public Employees’ Retirement System (CalPERS) with a member-wide webinar on the proposed amortization policy (reported earlier) and a legislative hearing on divestment mandates. More details are provided below in addition to a preview of the monthly Board Meeting taking place off-site next week.
CalPERS hosted a webinar about the proposed changes to the amortization period which seek to prospectively shorten the amortization period from 30 years to 20 years, in alignment with typical public accounting standards. During the webinar, CalPERS staff laid out the proposed policy, with examples of how specific scenarios would impact employer contributions.
For those who missed the live viewing, a recording will soon be posted online along with a corresponding member survey. Feedback collected in the survey will be presented to the Board before the decision is due at the February meeting, thus it is important that counties participate.
On January 10, the Senate Committee on Public Employment and Retirement and the Assembly Committee on Public Employees, Retirement, and Social Security held a joint informational hearing on
“How California’s Public Pension Funds Support California Values While Fulfilling Their Fiduciary Obligations.”
The hearing is in response to recent and currently pending state legislation that seeks to mandate divestment by CalPERS and/or CalSTRS from certain companies or investment opportunities that typically come at great cost to the overall system and its long-term sustainability. CSAC, along with several other stakeholders (including CalPERS itself), have actively opposed these measures as they pose significant harm to investment performance and effectively drive up employer costs.
The hearing offered an educational look at divestiture and its negative impacts, as outlined by staff from CalPERS and CalSTRS.
The CalPERS Board will be holding its monthly meeting off-site next week in Petaluma, CA.
The majority of items on the agenda are purely informational, with the exception of an action item that cropped up during the recent CalPERS Board Election. Voters were required to personally sign the ballot (rather than the return envelope) in order to have their votes validated. In response to concerns regarding vote secrecy, CalPERS staff is recommending the Board approve a regulatory change which would ensure the placement of the required voter signature on the return envelope for future elections.
Additionally, the Board will elect a President and Vice President to lead the agency in 2018. Stay tuned for an announcement in next week’s Bulletin publication.