What Is CalPERS?
The California Public Employees' Retirement System, also known as CalPERS, is an organization that provides numerous benefits to its 2 million members, of which 38% are school members, 31% public agency members, and 31% state members. Benefits available to members include health insurance, long-term care insurance, death benefits, a mortgage program, and the distribution of pension and retirement-related financial benefits. CalPERS is governed by a 13-member Board of Administration.
- Founded in 1932, CalPERS is a California organization that provides benefits to its members.
- CalPERS provides benefits, such as health insurance, long-term care insurance, retirement benefits, and more.
- CalPERS invests in foreign and domestic markets, of which it exercises great influence.
- CalPERS is the largest pension fund in the United States.
As of 2019, CalPERS managed $372.6 billion in assets, making it the largest public pension fund in the nation. Close to 3,000 employers participate in CalPERS, including more than 1,300 school districts and 1,500 public agencies in California. CalPERS pays for member benefits through a combination of member and employer contributions and investment income.
Members of CalPERS include state and school employees, some judges and legislators, as well as workers for participating local public agencies, such as police and firefighters. Not every city or county in California participates in CalPERS, and participating employers sometimes leave the organization.
CalPERS members receive health benefits along with their family members.
Retirement compensation for CalPERS members is based on a formula that uses factors such as an employee’s age when they retire, years of service, and final salary. The formula used varies among participating employers.
In addition to retirement benefits, most CalPERS members also receive health benefits. They often can include their family members as recipients of health benefits. Some jobs also offer disability and industrial disability retirement benefits for CalPERS members.
History of CalPERS
CalPERS began as the State Employees’ Retirement System in 1932. The program expanded to cover participating counties, cities, and school districts in 1939. Just over 20 years later, the retirement program grew to offer health insurance. The organization took its current name in 1992 to differentiate itself from other state programs.
Given its size, CalPERS Investments carries great power and can exercise significant pressure to make desired changes within the companies in which it invests. The fund invests in both foreign and domestic markets.
CalPERS Investments used to publish an annual "Focus List," made up of companies it deemed having worrisome financial performances and questionable or undesirable corporate governance practices. The list was discontinued in 2010 when CalPERS decided to approach companies directly, rather than publish the annual list. CalPERS works with listed companies to improve their performance. CalPERS has successfully used its considerable influence in various ways, such as taking part in a class-action lawsuit in 2009 against UnitedHealth Group Inc.