NEWS

CalPERS commits to defined benefit

A set of 12 federal legislative policy priorities adopted by the board of CalPERS underpins the fund’s commitment to preserving defined benefit plans, and positions the fund firmly in the defined benefit camp in the debate over pension design.

Vice-president of CalPERS board, Dr George Diehr (pictured), said dismantling defined benefit plans or imposing unreasonable mandates would only further erode confidence in America’s retirement system.

The fund has adopted a set of priorities which will serve as a “road map” for advancing CalPERS’ federal governmental goals on retirement, outline its positions on retirement benefits, funding and accountability of pension plans and social security.

CalPERS’ priorities call for the pension plan to support:

  • defined benefit retirement plans that provide sound income replacement in retirement through shared employee and employer responsibility
  • expanded opportunities for workers to have access to a defined benefit pension plan
  • tax policies that encourage preservation of pension plans and retirement savings accounts by allowing deferral of taxation contributions and earnings until benefits are paid in retirement
  • policies that ensure the highest level of integrity and accountability in the administration of supplemental retirement accounts and elements such as fee disclosure
  • policies that report public pension liabilities that reflect the long-term nature of public employee retirement plans
  • accounting standards that preserve the link between accounting and funding such as portfolio diversification, smoothing of investment gains and losses and managing growth of liabilities to minimise contributions volatility, including support of the Governmental Accounting Standards Board
  • policies extending the long-term solvency of the Social Security system without reducing benefits for CalPERS members and other Americans

Further, the priorities also call for the fund to oppose:

  • mandates on pension plan design features or policies that would undermine defined benefit plans
  • legislation that would establish mandates requiring specific funding, accounting or actuarial standards for state and local pension plans

The CalPERS priorities can be downloaded here

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