CalPERS board approves technical change to retirement law, actuarial valuations and audit RFP; adopts administrative law judge decisions

The California Public Employees' Retirement System Board of Administration on Feb. 19 voted to sponsor legislation to clarify provisions of the Public Employees' Retirement Law that calculate final compensation for members who are subject to the Public Employees' Pension Reform Act of 2013 (PEPRA), approved several actuarial valuation reports and contribution rates, authorized release of a request for proposals (RFP) for third‑party parallel actuarial valuations, and adopted five proposed administrative law judge decisions.

The board’s action to sponsor legislation was presented by CalPERS staff member Danny Brown, who said the change would add the term “pensionable compensation” to several final compensation provisions that currently use the classic‑member term “compensation earnable” so the statute clearly applies to both Classic and PEPRA members. “This proposal will clarify several final compensation provisions in the public employees retirement law that apply to both Classic and PEPRA members,” Brown said during the presentation.

Why it matters: the board framed the change as a technical, clarifying amendment to ensure consistent statutory language when CalPERS calculates benefits for PEPRA members. CalPERS staff said the agency has effectively applied the PEPRA definition already, but the change would put that practice explicitly in the cited provisions.

Board actions and supporting votes

- Motion to sponsor legislation to amend the Public Employees' Retirement Law to add “pensionable compensation” to specified final compensation provisions: moved by Jose Luis Pacheco; seconded by David Miller. The motion passed; one abstention was recorded (Patrick Henning).

- Approval of actuarial valuation reports and contribution transmittals from the Finance and Administration Committee: the board approved actuarial valuation reports as presented and adopted recommended employer and member contribution rates for the Judge's Retirement System II (employer contribution rate 22.62%; member contribution rate 16.75% for the period beginning July 1, 2025). The Finance and Administration Committee also recommended transmittal of the Judge's Retirement System (JRS) valuation reports to the governor and Legislature and the initiation of the 2025 member‑at‑large election notice. Committee motions were approved by voice vote.

- Legislators' retirement system contribution transmittal: the board approved transmittal of the 06/30/2024 Legislators' Retirement System actuarial valuation report and the related transmittal letter to the governor and Legislature. The committee moved to adopt the employer contribution amount shown in the report (493,219 as reported in the transmittal); the board approved the agenda item by voice vote. The transcript contained a typographical error in the stated period; the valuation documents transmitted are for the 07/01/2025–06/30/2026 reporting year as customary for these reports.

- Risk and Audit Committee recommendations: the board approved proposed revisions to the Office of Audit Services charter and authorized release of an RFP for third‑party parallel valuation and certification services to support June 2025–2026 actuarial reports. The committee presentation described minimum qualifications and the proposal evaluation process; the motions were approved by voice vote.

- Adoption of administrative law judge proposed decisions: the board adopted the proposed decisions listed as agenda items 8A‑1 through 8A‑5, with minor staff‑argued modifications to 8A‑1 and 8A‑2. The motion to adopt was moved by David Miller and seconded; the board approved by voice vote.

What the board said about transparency and investor data

CalPERS senior staff member Marcy (CalPERS staff) used the board report to emphasize transparency in both public and private market investing and to note recent benchmarking results. “Transparency is a key component of ensuring that we can provide long term investment returns,” Marcy said, adding that CalPERS ranked third globally in CEM Benchmarking Institute scores and first among U.S. public pension plans in the same survey. She also said CalPERS will continue engaging federal agencies on climate disclosure and other topics important to long‑term fiduciary assessment.

Public comment and nonbinding concerns

During the public comment period, representatives of the Retired Public Employees Association (RPEA) and several retirees raised concerns unrelated to the board motions: RPEA asked whether the board would reimburse certain conference expenditures (the board declined to reimburse); a retired member described administrative difficulties enrolling survivors in vision coverage and urged consolidation of dental and vision enrollment processes; and several speakers raised complaints about CalPERS responsiveness to public records requests and to individual benefit‑related litigation. Board members noted the limitations on public comment when matters are the subject of pending litigation.

Next steps and schedule

Staff said the legislative sponsorship will move forward with drafting and the Finance and Administration and Risk and Audit items will be implemented per the transmittal and procurement schedules. CalPERS staff also noted that many of the upcoming committee items (investments, contracting reports, and budget proposals) are scheduled for March and April committee meetings in Sacramento. The board recessed into closed session at the end of the meeting for litigation matters and advised it will reconvene in March.

Ending: The board scheduled its next public meeting for March 17–19, 2025, in Sacramento.