CalPERS actuarial staff described proposed regulatory amendments to Article 7.6 (Participation in Risk Pools) that would clarify the mechanics of pooling for contracting agencies and establish explicit criteria for when a rate plan enters or ceases participation in a risk pool.

Key proposal elements: Staff explained a set of four zones for plan sizes: plans under 100 active members would be required to enter the pool; plans with 100–149 active members could elect to enter; plans with 150–199 active members could, if already in the pool, elect to leave and become a non‑pooled plan; and plans with 200 or more active members could be removed from the pool by CalPERS. Staff said the change would address long‑standing ambiguity in the regulation and reflect that many pooled plans have not grown large enough to raise operational concerns.

Impact: Actuarial staff identified roughly 14 miscellaneous plans that would meet the proposed threshold to be removed from the pool at the earliest implementation (the 06/30/2026 valuation, which would affect 2028 rates). Staff described how pooling smooths contribution volatility for very small agencies while noting that non‑pooled plans assume gains and losses tied to their own membership experience.

Committee action: Trustee Melissa Willette moved the staff recommendation to amend specified sections of Article 7.6 and to submit the final rulemaking package for Office of Administrative Law review after the 45‑day public‑comment period if no changes are needed; Trustee David Miller seconded the motion. The committee approved the motion.

Why it matters: The change clarifies operational rules for many small contracting agencies and gives CalPERS the explicit authority to stop treating sufficiently large plans as pooled for contribution‑calculation purposes. Staff emphasized that the change is intended to reduce administrative churn and reflect practical plan sizes observed since the pooling structure was consolidated in 2014.

Next steps: The proposed rule changes will enter the public‑comment period. If no substantive comments are received, staff will submit the final rulemaking package to the Office of Administrative Law.