CalPERS’ remaining board meetings for the year, in May, July and September, will be open to the public as the fund deliberates a full asset-liability assessment, culminating in a potential change to the benchmark rate of return in December.
The benchmark rate of return has been 7.75 per cent since June 2003, and Joe Dear, CalPERS chief investment officer, said “it makes sense to question fundamental assumptions about rates of return and make sure we’re comfortable with the target we have”Â.
All of the staff material and all of the board’s deliberation will be done in public.
“They’ll be an opportunity for anybody to address the board at the May, July, September board meetings and express a view about conservatism, optimism, what they think the right amount of risk there should be in the portfolio. So it’s all out in the open for everybody to see as we do this work,”Â Dear said.
Dear said at the May meeting the board would discuss capital market discussions and adjustments might need to be made.
This would follow with a board offsite in July the portfolio and building blocks will be weaved together to examine the expected rate of returns.
Dear and his team will then build various model portfolios between September and the board’s workshop in November which will result in a recommendation to bring back to the board in December.
Alan Milligan, CalPERS interim chief actuary, said if the board elects to change the assumed rate of return it will likely result in increasing employer contribution rates.