CalPERS to Host Webinar for stakeholders on Asset Liability Management
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The California Public Employees Retirement System (CalPERS) will host a webinar on CalPERS Asset Liability Management on July 18, 2025, at 11 a.m. (PST). Interested parties may register here. Counties participating in CalPERS are encouraged to join.
What is ALM?
CalPERS conducts the Asset Liability Management (ALM) process to manage investment strategies relative to its assets and liabilities to maintain their funds. ALM aims to balance expected pension costs (liabilities) with expected investment returns (assets) by considering overall risks and the long-term sustainability of the system. This is done through a four-year cycle that reviews CalPERS’ investment portfolios and retirement plan liability projections – based on demographic changes, economic factors, and expected investment returns.
How does it impact us?
Critically for counties and other local agencies, the ALM process typically leads to a decision on potential changes to the discount rate, which could mean higher contributions for member counties.
The discount rate was last adjusted in 2021, when the CalPERS board approved a 6.8% discount rate, triggered under the Board’s Funding Risk Mitigation Policy, which automatically implements reductions to the discount rate in years when the investment returns exceeded certain assumptions. In April 2024, the board suspended the use of the policy, leading to their September 2024 decision to maintain the 6.8% discount rate.
According to CalPERS, “This webinar will provide an update on CalPERS’ proposed transition to a total portfolio approach, including governance, performance reporting, reference portfolio designs, active risk limits, and actuarial assumptions. Leaders from our investment, actuarial, and finance offices will present the latest information provided to the CalPERS Board and be available to answer your questions.” An initial presentation of the proposed changes will be given to the board in September.
Questions? Please reach out to Eric Lawyer, CSAC Legislative Advocate, at elawyer@counties.org with any questions, concerns, or requests you’d like to advocate for.