CalPERS Benefit Funding Levels Increase.

SAN FRANCISCO--(BUSINESS WIRE)--May 16, 1995--The Board of Administration for the nation's largest public pension fund, The California Public Employees' Retirement System (CalPERS), reinforced its financial solvency by announcing today that the level of funding available for their two largest employee groups continues to increase.

In a presentation to the Board's Benefit and Program Administration Committee (BPAC), CalPERS Chief Actuary Ron Seeling underscored the soundness of the retirement system by indicating that the overall funding status for these two groups, state employees and covered school employees, continues to improve even though their employer's contribution rates have decreased over the last 10 years and now remain level.

"As a consulting actuary to pension programs in both the private and public sector, I can confidently state that CalPERS is extremely well funded; and the data indicates that it will continue to be so in the future," said Seeling.

The CalPERS Board approved the proposed 1995/96 employer contribution rates for its two largest employer groups--the state and the 57 county superintendents of schools (representing approximately 1,100 school districts.) These two employers represent nearly two-thirds of all CalPERS members.

According to Seeling, the trend of increasing funding levels and stable employer contributions should apply, in general, to the 1,300 other individual public agencies which contract with CalPERS as well.

"It is our policy that all employers become fully funded to pay for their benefit obligations," said Dr. William Crist, CalPERS Board President. "Although we know that not all employers are funded at 100 percent or about, today's report clearly shows that all employers are moving in the right direction."

William Rosenberg, Chair of the BPAC, noted that the funding level for the single largest group of members -- the state miscellaneous group comprising nearly 190,000 members --"improved over 20% since 1986 and now stands at over 86% funded."

Funding levels represent the percent of total assets which must be available to pay for benefits. It is made up of member contributions (which are determined by law), employer contributions (which vary from year to year, depending on actuarial valuations conducted for each employer), and income from investments (which comprises two-thirds of the total).

CalPERS pays nearly $4.0 billion in benefits annually. It is anticipated that in 25 years annual benefit payments will reach $30 billion.

CalPERS is the largest publicly-funded retirement system in the country with assets valued at over $82 billion. The system provides retirement and health coverage to over one million current and retired public employees.

CONTACT: CalPERS, San Francisco 

Michael Ogata, 916/326-3320