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CalPERS risk and audit committee recommends Chiron as parallel valuation auditor after interviews
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Summary
On June 2, 2025, the CalPERS Risk and Audit Committee voted to recommend Chiron Incorporated as the boards parallel actuarial valuation and certification vendor, subject to final negotiations and board approval. Staff will negotiate with Chiron and may move to the next-highest scoring finalist if negotiations fail.
The California Public Employees Retirement System Board of Administration Risk and Audit Committee recommended on June 2, 2025, that the full board award the parallel valuation and certification contract to Chiron Incorporated, after interviewing five finalists and assigning interview scores that were combined with prior technical and fee scores.
The recommendation came after the committee conducted oral interviews for firms selected under RFP No. 2025-9409, which sought a three-year engagement to provide a parallel actuarial valuation and certification of CalPERS annual actuarial reports. Paul Cheetah, CalPERS staff actuary, summarized the solicitation and explained how preliminary technical, fee and DVBE incentive points had been calculated before the interviews.
Why it matters: The parallel valuation auditor provides an independent review and certification of CalPERS actuarial valuation work used for board oversight and financial reporting. The committees recommendation goes to the full board for final award at the board meeting in June.
Process and scoring details: CalPERS received six proposals and invited five finalists to interview: Chiron Incorporated; Gabriel, Roeder, Smith & Company (GRS); Gallagher Benefit Services Incorporated; Milliman, Inc.; and The Segal Company. Paul Cheetah read the preliminary totals derived from the technical proposal (200 points), fee proposal (300 points) and a 50-point Disabled Veteran Business Enterprise (DVBE) incentive. The preliminary totals reported by staff before interviews were: Gallagher 511; Chiron 493.2; GRS 481.49; Segal 428.61; and Milliman 417.37.
Each finalist was allotted 35 minutes (5-minute presentation, 25-minute Q&A, and 5 minutes for clarifying follow-ups). The committee had 500 interview points to assign to each firm; those interview scores were added to the preliminary totals to produce final combined scores.
Staff and committee explanations: Kevin Fine, CalPERS chief compliance officer, reminded the committee that the board had delegated interview-and-selection authority to the Risk and Audit Committee and that the committees recommendation would be considered by the full board. Justin Heeb, a CalPERS team member, read the technical scores (out of 200): Chiron 179; Segal 179; Milliman 163; Gallagher 161; GRS 165. Paul Cheetah described the next steps: the committee would deliberate, assign interview scores using a consensus method, and staff would combine those with the preliminary totals to identify the top-scoring finalist.
Deliberations and concerns: Committee members discussed their assessments in a straw poll and debated scoring approaches. Members asked staff to clarify the scoring components and the relative weight of technical versus fee points. Several members said they were impressed with Segals and Chirons presentations and referenced culture, independence and domain expertise in their reasoning. Members also discussed whether to rank firms by ordinal placement or to assign point spreads that reflect perceived closeness in performance. Staff reiterated that committees have discretion in allocating interview points but must produce numeric interview scores for each firm so staff can compute final totals under the procurement rules.
Votes and final scores: In a motion that assigned interview points, the committee awarded interview scores as follows: Gallagher 300; Chiron 500; GRS 100; Segal 500; Milliman 450. Combined with preliminary totals, staff reported final totals: Gallagher 811; Chiron 993.2; GRS 581.49; Segal 928.61; Milliman 867.37. A committee motion to recommend awarding the contract to Chiron, subject to final negotiation and satisfaction of requirements and authorizing staff to move to the next-highest scoring finalist if negotiations fail, passed by recorded voice vote. Those voting in favor included David Miller, Frank Ruffino (for Fiona Ma), Jose Luis Pacheco, Kevin Palki, Ramon Rubacaba and Melissa Willette; the chair did not cast a deciding vote as a matter of tradition.
Next steps: Staff will complete contract negotiations with Chiron and present the recommendation and final scores to the full CalPERS Board of Administration at the board meeting scheduled in mid-June. If staff determines negotiations are unsuccessful, staff is authorized to begin negotiations with the next-highest scoring firm.
