CalPERS reports $600 billion in assets, outlines "total portfolio" shift and health plan risk-sharing
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Summary
CalPERS reported roughly $600 billion in assets and a funded ratio of 83.7%, described a shift toward a "total portfolio" investment approach and said new health plan contracts include financial risk-sharing tied to quality metrics.
CalPERS officials told the board the system’s funded status and operations have improved while acknowledging continuing pressures in health care costs.
"As of December 25, we had over 600,000,000,000 in assets and our funded status was 83.7%," Brad Pacheco read into the record on behalf of Marci Frost, noting the system’s customer service teams had met nearly 98,000 members with a 95% satisfaction rating.
The remarks traced policy changes since 2016 — adjustments to the discount rate, actuarial assumptions, amortization policy and portfolio allocations — that staff said helped stabilize the fund and consider employers’ budgetary capacity. Pacheco said CalPERS plans to move to a "total portfolio approach" and highlighted private equity performance: "Last year, CalPERS private equity outperformed that of all 74 large pension funds tracked by the respected publication Pensions & Investments." He named Stephen Gilmore in describing the investment team leading the shift.
On health benefits, Pacheco said premiums remain a central concern. He reported an overall premium increase of 8% last year, with HMOs rising about 6%. He said new contracts place some payment at risk if plans fail to meet targets on five common health issues, including diabetes, hypertension, colorectal cancer, maternity care and childhood immunizations.
The presentation framed the portfolio and health-contract changes as efforts to improve long-term sustainability and to align incentives with better member health outcomes. The board did not take formal policy action on these strategy remarks during the meeting.
The board will receive further detail on related investment and health initiatives in upcoming committee meetings, including a regional competition study and an investment data and technology update.
