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Third‑party actuarial review finds CalPERS public‑agency valuations in tolerance; recommends disclosure clarifications
Summary
An independent parallel valuation by Chiron compared 20 CalPERS public‑agency plan valuations and found results broadly within tolerance (liabilities within ~1% aggregate, employer contributions within 5%). Chiron suggested minor report disclosure improvements; CalPERS actuarial staff agreed to make changes.
Randy Zubac of CalPERS’ actuarial office introduced Graham Schmidt from Chiron, who reported results from a third‑party parallel valuation of 20 public‑agency plans (the 10 largest by membership plus 10 randomly selected plans). Chiron used the CalPERS member‑level data, assumptions published on the CalPERS website and independent valuation models to replicate key numbers and compare results.
Chiron’s objective was to validate the actuarial office’s calculations. The firm examined present value of benefits, accrued liability, normal cost and employer contribution rates. The firm reported it met its tolerance goals—liability measures within 3% and contribution rates within 5%—and in aggregate was within about 1% for accrued liabilities and within about 2–3% on contribution calculations across most plans.
Directors asked detailed technical questions about sampling, drivers of differences for specific plans, and the effect of edge cases (for example, members close to retirement and differences in assumed terminations or refund behaviors). Chiron and CalPERS’ actuarial office explained that differences largely reflected variations in modeling choices, rounding and treatment of edge cases rather than errors in the underlying data. CalPERS staff accepted Chiron’s recommendations to clarify certain disclosures and update language in accompanying spreadsheets.
Chiron noted the parallel review is phase one of a three‑phase engagement; upcoming phases will cover other plan groups. The committee took the report as informational and staff said it will incorporate Chiron’s suggested wording changes in future valuations.
