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Third‑party parallel valuation finds CalPERS public‑agency valuations largely within tolerance
Summary
Chirons parallel valuation of 20 public‑agency plans found results within the projects tolerance thresholds: liabilities within 3% and employer contribution calculations within 5%; Chiron recommended minor disclosure clarifications and identified a few expected edge‑case differences.
Chiron consultant Graham Schmidt reported the results of a third‑party parallel valuation of 20 CalPERS public‑agency plans. Chiron independently calculated membership liabilities and contribution measures and compared them to the actuarial offices published valuation reports. Schmidt said the projects objective was to confirm the accuracy of valuation outputs and disclosure compliance.
Chiron selected the 10 largest plans (by membership) and 10 additional plans intended to cover different plan types and benefit formulas. The firm used member‑level data and the actuarial assumptions published by CalPERS and ran parallel models using ProVal. "Our goal is to be within 3% on all of the liability measurements... and within a 5% relative difference on the cost calculations," Schmidt told the committee; he reported that Chiron met those thresholds for all 20 plans and was generally within 1% in aggregate on accrued liabilities.
Chiron flagged several small, explainable differences that commonly arise from differences in valuation systems and edge cases, such as treatment of members near retirement or rounding/processing differences. The firm recommended modest clarifications to certain exhibits and disclosures to reduce reader confusion; CalPERS staff said some wording has already been updated.
Public comment included a technical question about differences in active pay averages in Chirons exhibit tables; a commenter asked staff to follow up with the specific data discrepancy.
Why it matters: Independent validation of the actuarial offices results supports the credibility of employer contribution rates and valuation disclosures. The parallel valuations close alignment provides assurance to employers, members and trustees that material calculations are reproduced independently.
Next steps: Chiron will continue with subsequent phases covering additional plan groups (state and schools, judges and legislators) and CalPERS staff will implement recommended clarifications to exhibits and disclosures.
