CalPERS actuarial valuations show improved funded ratios; employer contribution dollars to rise for 2026–27

Actuarial staff presented June 30, 2025 valuation results to the Finance & Administration Committee and the board approved the recommended employer and member contribution rates for multiple pools.

Nina Ramsey, leading the state valuation presentation, said the state plans now show an accrued liability of $272 billion and a fair‑value asset base of $215.5 billion, leaving an unfunded accrued liability of roughly $56.5 billion. "As of June 30th, 2025, we have an accrued liability of $272 billion, a fair value of assets of $215.5 billion, leaving us with an unfunded accrued liability of $56.5 billion, and a funded ratio of 79.2%," Ramsey said. Staff attributed the funded‑ratio gain to strong investment returns and noted that new actuarial assumptions and payroll growth increased required dollar contributions; projected contributions for fiscal year 2026–27 are estimated at $9.9 billion.

Paul Cheetah (actuarial office) presented the schools pool results: funded ratio improved to 74.7% from 69.6% and unfunded accrued liability declined to $35.7 billion. He recommended an employer contribution rate of 26.4% of payroll for 2026–27; the PEPRA member contribution rate will remain at 8% because the normal cost did not change by the threshold that triggers an adjustment.

Randy Zubc presented the Judges' Retirement System (JRS 2) valuation. Zubc reported investment performance of roughly 11.5% for that plan, producing an estimated funded status of 108.9% as of June 30, 2025. "A funded status of 108.9% generally means that the value of benefits for retirees and deferred members is fully covered by plan assets as long as the plan continues to earn its assumed return," he explained. Because JRS 2 is over 100% funded, the required contribution for 2026–27 is the normal cost only; no UAL payment is required.

The committee approved action items that adopt the recommended contribution rates for the state plans (action 5D), the schools pool (5E) and the judges plan (5F) by voice votes. Staff said they will publish the full valuation report later in the year and provide additional employer projection scenarios after the next fiscal year‑end investment results are known.

What it means: Although funded ratios have improved across pools, staff warned employers that required contribution dollars may rise because of actuarial assumption changes and payroll growth even when rates (percent of payroll) stay flat or decline slightly in some pools. Employers and stakeholders were advised to consult the published valuation materials and plan‑specific attachments for dollar and rate details.