CSAC Bulletin Article

CalPERS Releases New COVID-19 FAQs

May 7, 2020

The California Public Employees’ Retirement System (CalPERS) published a new webpage with frequently asked questions about the impact the COVID-19 pandemic has had on the system. The questions are sorted in to the broad categories of Active Member, Retired Member and Employer, and then further broken down by topic. The answers cover a myriad of issues but some of the key takeaways include:
 
Investments
The fiscal-year-to-date return for the pension fund was positive 5.6% as of December 31, 2019 and -4.1% as of March 31, 2020. This tremendous market volatility makes any estimate of return for the next two months highly uncertain. If markets remain relatively stable, the best estimate is that the 2020 fiscal year return will remain somewhere around zero. However, a good year does not offset a bad year in this situation. For example, a 19.25% return in 2020-21 would be required to offset a -4% return this year.
 
Any investment loss that the fund suffers in the 2019-20 fiscal year compared to the assumed 7% return will be reflected in the June 30, 2020, actuarial valuation.
 
Retired Annuitants
CalPERS released a Circular Letter outlining the impact of the Governor’s Executive Order N-25-20. The Order lifts the work hour limitations and wait period requirements for retired annuitants that are being utilized to ensure adequate staffing during this state of emergency. All other requirements/restrictions remain in effect, including no predetermined arrangements for those under normal retirement age or resolutions for those individuals fulfilling a permanent position on an interim basis. The exceptions outlined in the Circular Letter only apply to retirees working to ensure adequate state staffing to expedite emergency response and recovery.
 
Unemployment Insurance
Unemployment Insurance is not reportable for CalPERS purposes. Current law does not allow for unemployment insurance to be considered as compensation earnable or pensionable compensation and is not reportable to CalPERS.

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