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Legislators hear CalPERS actuarial update as officials defend assumptions and audits
Summary
At a joint Assembly–Senate hearing, CalPERS chief actuary Scott Turandau outlined the fund's use of a 6.8% discount rate and a 20‑year amortization period, explaining how those assumptions affect employer contribution rates and the state budget; lawmakers pressed for clarity on data timing and market volatility.
At a joint hearing of the California State Assembly Committee on Public Employment and Retirement and the Senate Committee on Labor, Public Employment and Retirement, CalPERS chief actuary Scott Turandau presented the California Actuarial Advisory Panel’s annual review and described key assumptions that determine contribution rates and liabilities.
Turandau told lawmakers that CalPERS continues to use a 6.8% long‑term investment return assumption. “For reference, CalPERS’ current discount rate is 6.8%,” he said, linking that assumption to how the system discounts future benefit payments and estimates expected investment earnings. He added that lower returns would require higher employer contributions and increase unfunded liabilities, which in turn pressures state and local budgets.
The chief actuary explained the plan’s 20‑year amortization approach for new gains and losses, using a mortgage analogy to describe…
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