DOCSLIB.ORG

2019-20 Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2020

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
2019-20 Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2020 2019-20 Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2020 Focused On Our Mission California Public Employees’ Retirement System A Component Unit of the State of California This page intentionally left blank. COMPREHENSIVE ANNUAL FINANCIAL REPORT Fiscal Year Ended June 30, 2020 Prepared through the joint efforts of CalPERS team members. Available online at www.calpers.ca.gov California Public Employees’ Retirement System A Component Unit of the State of California This page intentionally left blank. 2019-20 IN NUMBERS “Despite the unprecedented economic challenges due to COVID-19, we had many accomplishments this past fiscal year and ended on a strong note.” Marcie Frost, CalPERS CEO Where We Stand $392.5 billion 4.7% Net position (PERF) Net rate of return (PERF) 2 million+ 2,890 members Contracted employers 1.5 million 70.2% Total covered lives (health) Funded as of June 30, 2019 (PERF) 732,000+ 70.6% Retirees & beneficiaries Estimated Funded June 30, 2020 (PERF) $25.8 billion $43.6 billion Invested in California based Annual pension benefit payments (PERF) companies & projects This page intentionally left blank. Table of Contents Introductory Section............................................... 1 Actuarial Section .................................................... 111919 Professional AAwardswards............................................................................. 2 Actuarial Certifications ......................................................................... 120 Chief Executive OfficerOfficer’’ss Letter of Transmittal ..................................... 3 Actuarial Methods & Assumptions........................................................ 122 About CalPERS.................................................................................... 7 Summary of Funding Progress ............................................................ 125 Board of Administration........................................................................ 10 Exhibit A: Funding Progress – Unfunded Liability & Funded Ratios .... 126 Organizational Chart – Executive TeamTeam............................................... 12 Exhibit B: Funding Progress – Solvency TestTest ...................................... 127 Consultant & Professional Services..................................................... 13 Exhibit C: Sample Pay Increase Assumptions for Individual Members 129 Exhibit D: Sample Non-Economic Assumptions................................... 130 Financial Section .................................................... 15 Exhibit E: Single Life Retirement VValuesalues.............................................. 139 Independent Auditor’sAuditor’s Report .............................................................. 16 Exhibit F: Schedule of Active Member Valuation Data......................... 139 Management’s Discussion & Analysis (MD&A).................................... 19 Exhibit G: Members in Valuation.......................................................... 140 Exhibit H: Schedule of Retirees & Beneficiaries Added to and 143 Financial Section: Basic Financial Statements............................... 41 Removed from Rolls .......................................................................... Statement of Fiduciary Net Position – Fiduciary Funds ....................... 42 Exhibit I: Analysis of Financial Experience........................................... 144 Statement of Changes in Fiduciary Net Position – Fiduciary Funds.... 44 Statement of Net Position – Proprietary Funds.................................... 46 Statistical Section................................................... 149 Statement of Revenues, Expenses, and Changes in Net Position – 47 Introduction .......................................................................................... 150 Proprietary Funds .............................................................................. Changes in Fiduciary Net Position – Retirement Programs................. 150 Statement of Cash Flows – Proprietary Funds .................................... 48 Changes in Fiduciary Net Position – Pension Prefunding Plan ........... 153 Notes to the Basic Financial Statements ............................................. 49 Changes in Fiduciary Net Position – OPEB Plan................................. 154 Changes in Fiduciary Net Position – Custodial Funds ........................ 155 Financial Section: Required Supplementary Information.............. 77 Public Employees’ Retirement System Membership & Retirement Schedules of Changes in Net Pension Liability/(Asset) and Related 156 78 Data ................................................................................................... Ratios................................................................................................. Public Employees’ Retirement Fund Program Data............................. 158 Schedules of Plan Contributions.......................................................... 87 Public Agency Employers..................................................................... 167 Schedule of Investment Returns.......................................................... 89 Legislators’ Retirement System Membership & Retirement Data ........ 185 Schedule of Claims Development Information..................................... 90 Legislators’ Retirement System Program Data .................................... 186 Financial Section: Other Supplementary Information.................... 91 Judges’ Retirement System Membership & Retirement Data.............. 189 Administrative Expenses – All Funds................................................... 92 Judges’ Retirement System Program Data.......................................... 190 Investment Expenses – Investment Management Fees ...................... 93 Judges’ Retirement System II Membership & Retirement Data........... 193 Investment Expenses – Performance Fees ......................................... 96 Judges’ Retirement System II Program Data....................................... 194 Investment Expenses – Other Investment Expenses .......................... 97 Statistical Section: Other Programs................................................. 197 Consultant and Professional Services Expenses – All Funds.............. 100 Health Care Fund................................................................................. 198 Contingency Reserve Fund.................................................................. 199 Investment Section................................................. 103 Long-TLong-Termerm Care Fund.......................................................................... 200 Chief Investment Officer’’ss Letter.......................................................... 104 Health Benefits Program Data ............................................................. 201 Summary of Investments – PERF........................................................ 105 Defined Contribution Plans .................................................................. 209 Portfolio Comparisons – PERF ............................................................ 105 Long-TermLong-Term Care Program Data............................................................ 210 Asset Allocation – PERF ...................................................................... 106 Portfolio of California Investments at Fair VValuealue – PERF..................... 106 Largest Stock & Bond Holdings at Fair VValuealue – PERF......................... 107 Index of Tables, Charts & Lists ............................. 211 Schedule of Commissions & Fees ....................................................... 108 Glossary of Acronyms .......................................................................... 218 Private Equity Management Fees & Profit Sharing – PERF 110110 Investment Performance – LRF ........................................................... 115 Investment Performance – JRF II ........................................................ 115115 Investment Performance – CEPPTF.................................................... 116 Investment Performance – CERBTF.................................................... 117 Investment Performance – HCF........................................................... 118118 Investment Performance – LLTCFTCF ......................................................... 111818 This page intentionally left blank. INTRODUCTORY SECTION 2 Professional Awards 3 Chief Executive Officer’s Letter of Transmittal 7 About CalPERS 10 Board of Administration 12 Organizational Chart – Executive Team 13 Consultant & Professional Services Leading into the Future Introductory Section PROFESSIONAL AWARDS CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE IN FINANCIAL REPORTING The Government Finance Officers Association of the United States and Canada awarded a Certificate of Achievement for Excellence in Financial Reporting to CalPERS for our Comprehensive Annual Financial Report for the fiscal year ended June 30, 2019. This was the 24th year that CalPERS has achieved this prestigious award. To be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report that satisfies both generally accepted accounting principles and applicable legal requirements. We believe our current Comprehensive Annual Financial Report continues to meet the Certificate of Achievement Program’s requirements. PUBLIC PENSION STANDARDS AWARD The Public Pension Coordinating Council awarded
Load more

Recommended publications
  • Towards Sustainable Investment & Operations: Making Progress
    Towards Sustainable Investment & Operations Making Progress 2014 Report Contents A Message from CalPERS Leaders 1 CalPERS Investments — in Numbers 2 Introduction 4 Core Issues 5 Asset Liability Management: Ensuring Financial Sustainability 6 Investment Beliefs 7 Sustainable Investment Research Initiative 9 Cross Asset Class Team on Sustainable Investment 10 Financial Capital 13 Financial Market Reform 13 Engagement Through Global Partners 14 Voting Our Proxy 14 Focus List 15 External Managers and Vehicles 18 CalPERS Putting Principles into Practice 21 Physical Capital 22 Corporate Reporting 22 Carbon Asset Risk Initiative 22 Environmental Investment Initiatives 23 CalPERS Putting Principles into Practice 25 Human Capital 27 Corporate Engagement 27 Board Quality and Diversity 30 Asset Class Initiatives 31 CalPERS Putting Principles into Practice 33 Appendix 1 34 Appendix 2 38 Appendix 3 39 A Message from CalPERS Leaders We are pleased to present our second report on CalPERS sustainability work, Towards Sustainable Investment & Operations. In our first report we highlighted the importance of taking responsibility This report focuses on our progress towards the goals we set Sustainability continues to be at the heart of what we do To bolster our internal expertise and focus we created CalPERS employs a “total fund” approach to sustainable the Cross Asset Class Team on Sustainable Investment investment The first task in implementing this approach This group includes members from all areas of the was to develop principles for sustainable investment
    [Show full text]
  • Agenda Item 5B
    Item 5b - Attachment 3, Page 1 of 45 SEMI - ANNUAL PERFORMANCE R EPORT California Public Employees’ Retirement System Private Equity Program Semi-Annual Report – June 30, 2017 MEKETA INVESTMENT GROUP B OSTON C HICAGO M IAMI P ORTLAND S AN D IEGO L ONDON M ASSACHUSETTS I LLINOIS F LORIDA O REGON C ALIFORNIA U N I T E D K INGDOM www.meketagroup.com Item 5b - Attachment 3, Page 2 of 45 California Public Employees’ Retirement System Private Equity Program Table of Contents 1. Introduction and Executive Summary 2. Private Equity Industry Review 3. Portfolio Overview 4. Program Performance 5. Program Activity 6. Appendix Vintage Year Statistics Glossary Prepared by Meketa Investment Group Page 2 of 45 Item 5b - Attachment 3, Page 3 of 45 California Public Employees’ Retirement System Private Equity Program Introduction Overview This report provides a review of CalPERS Private Equity Program as of June 30, 2017, and includes a review and outlook for the Private Equity industry. CalPERS began investing in the private equity asset class in 1990. CalPERS currently has an 8% interim target allocation to the private equity asset class. As of June 30, 2017, CalPERS had 298 investments in the Active Portfolio, and 319 investments in the Exited Portfolio1. The total value of the portfolio was $25.9 billion2, with total exposure (net asset value plus unfunded commitments) of $40.2 billion3. Executive Summary Portfolio The portfolio is diversified by strategy, with Buyouts representing the largest exposure at 66% of total Private Equity. Mega and Large buyout funds represent approximately 57% of CalPERS’ Buyouts exposure.
    [Show full text]
  • Global Gadflies: Applications and Implications of U.S.- Style Corporate Governance Abroad
    NYLS Journal of International and Comparative Law Volume 17 Number 2 THE SIXTH ANNUAL ERNST C. Article 28 STIEFEL SYMPOSIUM 1997 GLOBAL GADFLIES: APPLICATIONS AND IMPLICATIONS OF U.S.- STYLE CORPORATE GOVERNANCE ABROAD Mary E. Kissane Follow this and additional works at: https://digitalcommons.nyls.edu/ journal_of_international_and_comparative_law Part of the Law Commons Recommended Citation Kissane, Mary E. (1997) "GLOBAL GADFLIES: APPLICATIONS AND IMPLICATIONS OF U.S.-STYLE CORPORATE GOVERNANCE ABROAD," NYLS Journal of International and Comparative Law: Vol. 17 : No. 2 , Article 28. Available at: https://digitalcommons.nyls.edu/journal_of_international_and_comparative_law/vol17/iss2/ 28 This Notes and Comments is brought to you for free and open access by DigitalCommons@NYLS. It has been accepted for inclusion in NYLS Journal of International and Comparative Law by an authorized editor of DigitalCommons@NYLS. GLOBAL GADFLIES: APPLICATIONS AND IMPLICATIONS OF U.S.-STYLE CORPORATE GOVERNANCE ABROAD I. INTRODUCTION Over the past decade, international business participants have come to recognize that the structure of corporate governance' is more than a local custom to be accepted by default.2 Rather, such local structures are increasingly recognized as substantive factors affecting the relative desirability of particular markets.3 The Organization for Economic Co- operation and Development (OECD), a major international economic think- tank, has commented, "given the important institutional differences among countries concerning the corporate governance structure, some differences in the cost of capital are likely to persist in the future."4 The cost of capital is, of course, a major factor affecting a given markets' appeal to investors.' Competition to liberalize markets in order to attract foreign investors is the "most important policy trend of the 1990s for international investment."6 However, "the greater freedom this gives 1.
    [Show full text]
  • Filed Complaint for Civil Penalties
    CONFOIDv.ffiD COpy OF ORIGn\~AL FILED 1 EDMUND G. BROWN JR. L~ Angeles ~uperior Court Attorney General of the State of California 2 MARK J. BRECKLER (State Bar No. 81577) MAY 0.·5 2010 ~ Senior Assistant Attorney General JobA. Cfark~} };;x:~gl!tive Officer/Cler @1 3 JON M. ICHINAGA (State BarNo. 137290) Supervising Deputy Attorney General ~ ~'_~~~lA;MS~_______ 4 W. RICHARD SINTEK (State Bar No. 134894) ".- '~~~l1mlf?r © Deputy Attorney General 5 XIANCHUN J. VENDLER (State BarNo. 180507) Deputy Attorney General CASE MANAGEMENT CONFERENCE © 6 300 South Spring Street, Suite 1702 AUG 2:1 2010 Los Angeles, CA 90013 7 Telephone: (213) 576-7769 Date Facsimile: (213) 897-2801 8 E-mail: [email protected]. gov John H. Reid ~.\=- 9 Attorneys for Plaintiff The People of the State of California 10 SUPERIOR COURT OF THE STATE OF CALIFORNIA 11 COUNTY OF LOS ANGELES 12 13 WEST DISTRICT 14 THE PEOPLE OF THE STATE OF CASE NO: 15 CALIFORNIA, SCI07850 16 Plaintiff, COMPLAINT FOR CIVIL PENALTIES, s-' ____ ._. __ .___ .________ __________.______ _ANCI~LA_RY RELl¥F'_~~P. ___ . ___________ " ___. ___ ~ 17 INJUNCTIVE RELIEF ALFRED ROBLES VILLALOBOS, 18 ARVCO CAPITAL RESEARCH, LLC, (Cal. Corp. Code §§ 25210, 25216(a), and FEDERICO R. BUENROSTRO JR., and 25403; Bus. & Prof. Code § 17200) 19 DOES 1 - 100, inclusive, Verified Answer Required Pursuant To 20 Defendants. California Code Of Civil Procedure § 446 21 Exempt From Filing Fees Pursuant To Government Code § 6103 22 Plaintiff, the People ofthe State of California ("the People"), by and through Edmund G. 23 Brown Jr., Attorney General of the State of California, allege as follows: 24 INTRODUCTION 25 1.
    [Show full text]
  • PHILIP ANGELIDES Fureneurer Strife Nf Mnlifnrnin
    PHILIP ANGELIDES fUreneurer strife nf Mnlifnrnin November 23,2004 Mr. Jonathan G. Katz Secretary U.S. Securities and Exchange Commission 450 5thStreet, N. W. Washington, DC 20549-0609 Re: File No. S7-I07041 ~&ulationNMS, Release No. 34-49325 (February 26, 2004) (the -"NMS Relepse") qnd.File No. SR-NYSE-2004-5, Release No. 34-501 73 (August I0, 2004) . , r I s Dear Mr. Katz: As the Treasurer of the State of ~aliforniaand member of the boards of the Public Employees' Retirement System (CalPERS) and State Teachers' Retirement System (CalSTRS), I must strongly urge that the Commission postpone action on the proposed "trade-through" rule of Regulation NMS and first seek greater clarification of the NYSE7sproposed "hybrid market" model, in order to ensure that any market reforms will be fair to all investors. Although we fully understand that the stated intent of the "trade-through" rule is to protect the rights of investors, we think the rule, in its present proposed form, actually risks hurting investors, including hard working employees in our CalPERS and CalSTRS systems by limiting the freedom of investors and their fiduciaries to choose how and where their securities trades will be carried out. My office also recently reviewed the NYSE hybrid proposal, and some of the comments thereon. The NYSE proposal lacks substantial critical detail which could give us any substantive understanding of how that model would or could benefit investors and eradicate current market inefficiencies and inequities. On behalf of the State of California, and indeed all investors, I urge the Commission to require the NYSE to provide much greater detail and cantext around the "hybrid" proposal so as to enable us to understand properly and evaluate i% impact.
    [Show full text]
  • 2021 Health Benefit Summary Provides Only a General Employee Health Benefits in California, and the Overview of Certain Benefits
    2021 | Health Benefit Summary Helping you make an informed decision about your health plan About CalPERS About This Publication CalPERS is the largest purchaser of public The 2021 Health Benefit Summary provides only a general employee health benefits in California, and the overview of certain benefits. It does not include details of second largest public purchaser in the nation all covered expenses or exclusions and limitations. Please after the federal government. Our program refer to each health plan’s Evidence of Coverage (EOC) provides benefits for 1.5 million public booklet for the exact terms and conditions of coverage. employees, retirees, and their families. Health plans mail EOCs to new members at the beginning Depending on where you reside or work, of the year, and to existing members upon request. In case CalPERS offers active employees and retirees of a conflict between this summary and your health plan’s one or more types of health plans, which EOC, the EOC establishes the benefits that will be provided. may include: The 2021 Health Benefit Summary provides valuable infor- • Health Maintenance Organization (HMO) mation to help you make an informed choice about • Preferred Provider Organization (PPO) your health plan and health care providers. This publication • Exclusive Provider Organization (EPO) compares covered services, copayments, and benefits for (for members in certain California counties) each CalPERS health plan. It also provides information about plan availability by county and a chart summarizing The CalPERS Board of Administration annu- important differences among health plan types. ally determines health plan availability, covered You can use this information to determine which health benefits, health premiums, and copayments.
    [Show full text]
  • Service Retirement Election Application This Page Intentionally Left Blank to Facilitate Double-Sided Printing
    A Guide to Completing Your CalPERS Service Retirement Election Application This page intentionally left blank to facilitate double-sided printing. TABLE OF CONTENTS Introduction .............................................3 Retirement Planning Resources ...........................4 Key Points to Consider Before You Retire ...................5 Other Considerations .....................................6 If You Become Disabled ..................................6 Power of Attorney ......................................6 Emergency Retirement ..................................6 Divorce, Legal Separation, or Termination of Domestic Partnership ..6 Working After You Retire .................................7 Benefit Forfeiture for Felony Convictions .....................7 How to Complete Your Service Retirement Election Application ......................................8 What Happens Next? .................................. 18 Supporting Documents .................................. 20 Retirement Forms ....................................... 21 Retirement Allowance Estimate Request Form ................. 21 Service Retirement Election Application Form ................. 23 Justification for Absence of Spouse’s or Registered Domestic Partner’s Signature Form ............................. 33 CalPERS Health Benefits ................................. 35 Health Insurance Covered Under PEMHCA ................. 35 Medicare ............................................ 36 Dental Coverage and Vesting Requirements (State and CSU Members Only) .......................
    [Show full text]
  • Calpers Looks at Social Issues in Emerging Markets - Print Forma
    MANY QUESTIONS: CalPERS looks at social issues in emerging markets - Print Forma... Page 1 of 3 MANY QUESTIONS: CalPERS looks P&I REPRINTS This copy is for your at social issues in emerging personal, non- commercial use only. To order markets presentation-ready copies for distribution to your colleagues, By Joel Chernoff clients or customers, use the Source: Pensions & Investments Reprints tool or the Reprints & Date: January 10, 2000 Permissions link at the top or bottom of any article, SACRAMENTO, Calif. -- CalPERS is debating how to expand its influence on respectively. labor and human rights practices in emerging markets. View reprint options Order a reprint article A push into these social issues in emerging markets would be a major now initiative for the $161 billion California Public Employees' Retirement System. It would follow on the fund's well-publicized corporate governance efforts in developed markets. In a Dec. 13 workshop addressing in which countries the fund should invest, board members differed as to whether they should take a more active role or stay away from countries that present high levels of political risk because of their policies. No decisions were made at the workshop. At the end of the afternoon, about one-third of the 13 board members said they had not made up their minds. The board directed the staff to come back with recommendations for its April meeting. But the lines of the debate were clearly drawn. William Crist, president of the CalPERS' Board of Administration, said that "ignoring or staying away is not going to make it better.
    [Show full text]
  • A Network of Opportunity
    April 1, 2005 • www.einternalmedicinenews.com Practice Trends 77 California Health Care Purchaser Rejects HSAs BY JOYCE FRIEDEN unaffordable,” he said. CalPERS partnered tices that they were in danger of being switch their primary care physicians. Al- Associate Editor, Practice Trends with California Blue Shield to do an analy- dropped from CalPERS’ provider network though the move resulted in complaints sis of the costs. unless they dropped their costs and agreed from members as well as the California WASHINGTON — Despite their grow- “Blue Shield came up with what was to undergo performance assessments. The legislature, Mr. Buenrostro has no regrets. ing popularity, health savings accounts then a shocking discovery: In many cases proposed change would have saved the “It will save tens of millions of dollars are not a good solution to the problem of there was no correlation between price plan $36 million in the first year and $50 for our members and the taxpayers [who rising health care costs, at least not for and quality,” he continued. “I thought million for the next few years. pay our salaries], and the decision helped California state employees and retirees, they were kidding.” For example, they After negotiations with the hospitals us keep our HMO and PPO premium in- Fred Buenrostro said at a health care con- found that the cost of chemotherapy and scrutiny from the state insurance de- creases for members under 65 at 9.9% gress sponsored by the Wall Street Jour- could range from $135,000 to $300,000. partment, CalPERS ended up dropping 24 without any takeaways or any increases in nal and CNBC.
    [Show full text]
  • FOR IMMEDIATE RELEASE CONTACT: Mitchel Benson February 3, 2004 (916) 653-4052
    NEWS RELEASE CALIFORNIA STATE TREASURER PHIL ANGELIDES FOR IMMEDIATE RELEASE CONTACT: Mitchel Benson February 3, 2004 (916) 653-4052 STATE TREASURER PHIL ANGELIDES LAUNCHES ‘GREEN WAVE’ ENVIRONMENTAL INVESTMENT INITIATIVE TO BOLSTER FINANCIAL RETURNS, CREATE JOBS AND CLEAN UP THE ENVIRONMENT Landmark Environmental Initiative Will Boost Growing Economic Sector and Reduce Risks to Pensioners and Taxpayers PALO ALTO, CA – State Treasurer Phil Angelides, joined today by environmental, labor and business leaders, launched a landmark environmental Green Wave initiative to bolster financial returns, create jobs and clean up the environment. The four-pronged initiative calls on the State’s two large public pension funds – the California Public Employees’ Retirement System (CalPERS) and the California State Teachers’ Retirement System (CalSTRS) – to marry the jet stream of finance and capital markets with public purpose by committing $1.5 billion to investments in cutting-edge technologies and environmentally responsible companies. The goal of the initiative is to improve long-term financial returns for pensioners and taxpayers through investments in the burgeoning environmental technology sector, while also reducing the risks to the pension funds posed by corporate environmental liabilities. “Now is the time for California to catch the ‘Green Wave’ of smart, environmental investments and responsible corporate environmental leadership,” Angelides – who sits on the boards of both CalPERS and CalSTRS – said at a news conference here at Nanosolar
    [Show full text]
  • E2 and California's Green Wave Initiative
    E2 and California's Green Wave Initiative "E2 served in a critical advisory capacity on Green Wave, from the earliest discussions to the actual proposal of the initiative. The organization’s resources and expertise were invaluable in helping to shape the Green Wave concept, by bringing together a wide range of business and environmental interests and experience, which we were able to draw upon in drafting the environmental investment proposal. E2 serves a unique public purpose by advancing the economic benefits of good environmental policy." Phil Angelides, California Treasurer California Treasurer Phil Angelides launched a four-pronged plan to improve long-term financial returns of the State's two largest public pension funds – the California Public Employees' Retirement System (CalPERS) and the California State Teachers' Retirement System (CalSTRS) – by calling on the funds to commit $1.5 billion to investments in environmental technologies and environmentally responsible com- panies. (For more information please see: www.treasurer.ca.gov/news/greenwave.htm.) E2 helped bring this concept to fruition by: 1. Bringing the right people to the Table: E2 convened five roundtable discussions with the Treasurer's office, CalPERS, CalSTRS and our network of entrepreneurs, venture capitalists, investment bankers, marketing professionals and public policy experts. 2. Identifying opportunities and barriers: Pooling our expertise and networks, we were able to point out and problem-solve possible barriers to the initiative. 3. Accelerating the Process: E2's input and research helped the state bring Green Wave from a concept to a board vote in just 10 months. TIMELINE FOR GREEN WAVE E2 ACTION April 19, 2004 CalPERS votes to invest up to $500 M in ¾ April 15, 2004 environmentally screened stock funds.
    [Show full text]
  • Calpers Governance & Sustainability Principles
    CalPERS’ Governance & Sustainability Principles Last Revised: September 2019 Table of Contents Introduction 1 Purpose 3 Governance & Sustainability Principles 5 A. Investor Rights 6 B. Board Quality: Diversity, Independence and Competence 10 C. Executive, Director, and Employee Compensation 23 D. Corporate Reporting 27 E. Regulatory Effectiveness 34 APPENDIX A 37 APPENDIX B 38 Introduction Our mission is to “deliver retirement and health care benefits to members and their beneficiaries.” The California Public Employees’ Retirement System (CalPERS, System) is the nation's largest defined benefit public pension fund with a duty to deliver the retirement and health benefits promised to our members. This responsibility applies not just to our current beneficiaries, but also to future members who may not retire for several decades. We therefore need to ensure that our commitments can be honored over the long-term. A vital part of this is ensuring that our investments, which fund around two-thirds of our pension payments every year, generate the highest possible returns at an acceptable level of risk. This is a task managed by the CalPERS Investment Office, overseen by the CalPERS Board of Administration, and guided by our Investment Beliefs1 and Core Values2. This responsibility is known as our Fiduciary Duty3. Over the years the CalPERS Principles have evolved from a guide to proxy voting in public markets, to a broader statement of our views on best practices guiding our engagement with companies, advocacy agenda with policy makers, and expectations for both our internal and external managers across the total fund. As the governance and sustainability agenda has developed, so too have the CalPERS Principles.
    [Show full text]