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CalPERS compliance office highlights progress; public warns of many aged employer audit findings
Summary
CalPERS annual compliance report described strengthened conflicts‑of‑interest oversight, AI risk framework, improved data privacy and fraud detection efforts. A public commenter said 86 audit findings are aged over one year, most concerning retired‑annuitant employment cases and a new circular affecting school vacation reporting.
Deputy Chief Compliance Officer Cammy E Bank delivered the enterprise compliance annual report, summarizing cross‑organization work to strengthen compliance, risk and governance. Among the accomplishments cited were maturation of conflicts‑of‑interest oversight and an investment compliance advisory onboarding process; completion of required leader gift disclosures; strengthened actuarial data integrity processes during the valuations; expanded training and a compliance and risk liaison program (CARL); and an information‑security AI risk framework to manage generative AI adoption securely.
Cammy Bank also described operational improvements: an increase in the number of risk and control self‑assessments completed, implementation of a secure data locker for confidential HR data, enhanced secure transfer protocols for health‑plan PHI and expanded fraud‑detection capabilities tied to member claims data.
During public comment Margaret Brown raised concerns about aged audit observations in the employer compliance program. She said staff provided her a printout showing "86 aged findings over one year old" and that roughly 80% of those older findings relate to retired‑annuitant employment matters. Brown warned that long‑open findings can have severe effects on retirees and beneficiaries and urged additional staff support and process improvements to accelerate resolution. She also raised a separate operational concern about a recently issued circular that changes how vacation time around fixed school breaks is credited for retirement, saying it will be difficult to implement and could harm employees.
Why it matters: The compliance report identifies control and governance improvements across CalPERS operations and signals where the organization is prioritizing risk reduction. Public comments about aged audit findings and specific employer compliance issues emphasize the need for timely remediation to limit harm to affected members and to prevent future recurrence.
Next steps: Staff will continue implementing the multi‑year compliance initiatives, complete planned risk self‑assessments, and the committee requested follow up on the public commenters data questions and aged findings list.
