The 2024-25 Budget: Proposition 2 Debt Payment Proposals

Mar 20, 2024 - Investment Returns. Under the California Constitution, the CalPERS Board has plenary authority and fiduciary responsibility to invest the pension system ’s assets. The returns on these invested assets constitute the largest funding source for the system.
https://lao.ca.gov/Publications/Report/4887

Strengthening the CalSTRS Funding Plan

Mar 10, 2021 - Simplifying these aspects of the funding plan could help improve legislative oversight, lessen the volatile effects of investment returns on the state ’s actuarially required contribution rate, and align impacts of investment returns across the state ’s and employers ’ actuarially required contribution rates.
https://lao.ca.gov/Publications/Report/4400

The 2022-23 Budget: Analysis of the Care Economy Workforce Development Package

Mar 10, 2022 - Recent State Investments in Care Economy Workforce In Recent Years, State Has Made Substantial Investments for Care Economy Workforce Development. Figure  1 shows recent major state funding for care economy workforce development.
https://lao.ca.gov/Publications/Report/4572

MOU Fiscal Analysis: Bargaining Unit 6 (Corrections)

Sep 7, 2023 - The primary difference between the two plans is (1)  who makes investment decisions and (2)  who bears the risk of investment losses. In the case of a defined benefit plan, the employer chooses how the funds are invested and bears all the risk of investment loss —the employee is provided a guaranteed annuity in retirement.
https://lao.ca.gov/Publications/Report/4800

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 Units 10 (Professional Scientists) and 18 (Psychiatric Technician)

Sep 9, 2025 - These contributions are invested in a trust fund. Under the funding plan, the state may not use the assets of the trust fund to pay benefit costs until 2046 or the benefit is fully funded, whichever comes first.
https://lao.ca.gov/Publications/Report/5073

MOU Fiscal Analysis: Bargaining Unit 18 (Psychiatric Technicians)

Jan 9, 2020 - The normal cost is the amount of money that actuaries determine —based on assumptions about future investment returns and the number of years people will live in retirement —must be set aside to pay for the benefit that employees earn today but will not receive until they retire.
https://lao.ca.gov/Publications/Report/4134

MOU Fiscal Analysis: Bargaining Unit 5 (Highway Patrol)

Aug 23, 2024 - Depending on how actual experience between now and 2029-30 deviates from actuarial assumptions (for example, investment returns), the state’s contribution could be higher or lower than currently projected.
https://lao.ca.gov/Publications/Report/4920

MOU Fiscal Analysis: Bargaining Unit 16 (Physicians, Dentists, and Podiatrists)

Jul 14, 2025 - The reduced amount of money invested in the trust fund will result in higher unfunded liabilities in the long-run. In most of the agreements, the state ’s contributions towards the benefit would be fully restored in 2027-28.
https://lao.ca.gov/Publications/Report/5064

MOU Fiscal Analysis: Bargaining Unit 8 (Firefighters)

Aug 19, 2025 - As such, if the state were to incorporate a DROP as part of its compensation package to Uni t 8 members, the state would bear the risks associated with the program (for example, if actual investment returns fell short of the interest rate applied to funds in a DROP account).
https://lao.ca.gov/Publications/Report/5066