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Pension Funds

CalPERS’ funded status flat in past fiscal year; state contributions increased

CalPERS' funded status was 68% at of the end of the June 30 fiscal year, flat from 68.3% on June 30, 2016, according to reports by the $351.5 billion Sacramento-based pension plan.

At the same time, the California Public Employees' Retirement System's board on Wednesday increased the state's pension plan contributions to $6.3 billion from $5.9 billion for the 2019 fiscal year.

Staff noted in a report that the pension plan's funded status benefited from an investment return for fiscal year 2017 of 11.2% that was greater than expected, but those gains were offset partially by an increase in liability due to last year's reduction of its assumed rate of return to 7.25% from 7.375%.

Separately, the board also approved changes that give the CEO sole authority to hire, evaluate and terminate the chief investment officer, chief actuary, chief financial officer and general counsel. Previously, the board's performance, compensation and talent management committee shared responsibility with the CEO for hiring, evaluating and terminating the CIO and could veto the CEO's hiring and termination decisions for the chief actuary, CFO and general counsel positions.

At the March 20 meeting of the performance, compensation and talent management committee, Douglas Hoffner, deputy executive officer of operations and technology, proposed giving the CEO sole authority for hiring, evaluating and firing the CIO because it aligned with the CEO's authority over other direct reports, including the CFO, general counsel and chief actuary. Staff recommended the board retain veto authority over all four positions. The committee, however, agreed with Richard Costigan, committee vice chairman, that the board relinquish its veto authority.

"As we know, the board is not the appointing authority of those employees ... the only person that serves at the pleasure of the board is the CEO," Mr. Costigan said at the March committee meeting.

The board approved the changes without discussion.