The Finance and Administration Committee voted on Sept. 16 to maintain CalPERS’ current discount rate and expected investment rate of return after staff presented a funding‑risk mitigation analysis triggered by investment returns that exceeded the discount rate by 2% (an 11.6% return for fiscal 2025).

Michelle Nix of CalPERS staff told the committee the funding risk mitigation policy requires Board action when actual investment returns exceed the discount rate by 2% or more. Staff recommended no change while the formal asset‑liability management (ALM) process is underway, citing other existing mechanisms by which the Board can alter assumptions — either via the ALM process or outside of it. The proposed operational change under discussion would have reduced the discount rate by 0.05 percentage point; staff advised the Board to defer that step until the ALM work completes.

Ramon Rubalcaba moved to adopt the staff recommendation to maintain the current discount rate; the motion was seconded and passed with a voice vote. Trustees said the decision would provide budget and contribution stability for employers while staff continues the ALM process and observes long‑term portfolio and economic dynamics.