Savings Plus Program: An Optional Retirement Benefit for State Employees

Mar 14, 2017 - To illustrate how different expense ratios can affect a person ’s savings, Figure  1 illustrates the effect of $10,000 invested to earn an average return of 5  percent each year over 25  years with (1)  an annual operating expense of 1  percent compared with (2)  an annual operating expense of 0.5  percent.
https://lao.ca.gov/Publications/Report/3616

The 2025-26 Budget: Concession Bargaining

May 19, 2025 - The first is payment towards the “normal cost, ” which is the amount of money that actuaries determine (based on actuarial assumptions like expected investment returns on assets) must be contributed to prefund the benefit earned by employees today.
https://lao.ca.gov/Publications/Report/5047

MOU Fiscal Analysis: Bargaining Unit 6 (Corrections)

Sep 7, 2023 - The normal cost is the amount of money that actuaries determine must be set aside for the benefit employees earn today so that the contribution and any future investment returns on that contribution are sufficient to pay for the benefit after the employee retires.
https://lao.ca.gov/Publications/Report/4800

The 2017-18 Budget: Governor’s CalPERS Borrowing Proposal

May 16, 2017 - The administration assumes CalPERS investments will earn an average return of 7  percent each year. However, this return depends largely on the U.S. stock market, which fluctuates significantly. To illustrate fluctuations in the market, Figure  7 shows the annual returns of the S &P 500 over the past 30 years.
https://lao.ca.gov/Publications/Report/3673

A Review of the CalSTRS Funding Plan: Background

Feb 2, 2016 - That is, the assets held by the fund at any one time have been insufficient to cover benefits earned to that date. As of the most recent estimates, CalSTRS would need an additional $72.7 billion in its investment fund to pay for teacher pension benefits earned as of the end of 2013-1 4.
https://lao.ca.gov/Publications/Report/3332

The 2024-25 Budget: Proposition 2 Debt Payment Proposals

Mar 20, 2024 - Revenues from investment returns vary significantly year to year depending on market performance; however, CalPERS assumes an annual return of 6.8  percent. Employee and Employer Contributions to “Normal Cost. ” The normal cost is the amount actuaries determine must be contributed to the system in a given year to fund the benefit earned by state employees in that year.
https://lao.ca.gov/Publications/Report/4887

MOU Fiscal Analysis: Bargaining Unit 8 (Firefighters)

Jan 23, 2017 - The agreement deposits these payments in dedicated accounts in an invested trust fund managed by CalPERS. These accounts would generate earnings and gradually reduce unfunded liabilities over the next three decades or so.
https://lao.ca.gov/Publications/Report/3534

MOU Fiscal Analysis: Bargaining Units 1, 3, 4, 11, 12, 13, 14, 15, 17, 18, 19, 20, and 21

Jan 10, 2017 - Because the state ’s retiree health benefit is the same for an employee earning $30,000 as it is for an employee earning $100,000, the amount of money needed to prefund the benefit represents a larger share of a lower-income worker ’s salary.
https://lao.ca.gov/Publications/Report/3520

A Review of the CalSTRS Funding Plan: CalSTRS Funding Plan Relies on Abstract Calculation

Feb 2, 2016 - As we understood the plan, districts and the state would share in investment gains and losses roug hly in proportion to the amounts they owe. In other words, when CalSTRS records a large investment gain, we thought most of the gain would be used to reduce the district share of unfunded liabilities with the rest reducing the state share.
https://lao.ca.gov/Publications/Report/3333

A Review of the CalSTRS Funding Plan: Theoretical Investment Gains Have Shifted Unfunded Liabilities to Districts

Feb 2, 2016 - Specifically, the calculation estimates what CalSTRS’ unfunded liabilities would be now if (1) teachers earned less generous pension benefits and (2) the state and teachers had contributed more to CalSTRS’ main pension fund.
https://lao.ca.gov/Publications/Report/3334