Navigating CalPERS 2024 Valuation Reports

Watch The Recording Here

On September 18, 2025, TrueComp hosted a webinar to help public agencies understand the 2024 CalPERS valuation reports, the assumptions driving contributions, and strategies for budgeting and risk management. The session featured insights from Ira Summer and Dan Matusiewicz, focusing on practical guidance for agencies navigating the valuation data.

Understanding Amortization and Unfunded Liability (UAL) Payments

• UAL payments grow at a fixed 2.8% rate, regardless of agency salary increases. This ensures predictable short-term budgeting while maintaining long-term funding stability.
• Agencies do not take on liabilities from new hires’ past service; each agency only funds the portion accrued under its employment.
• Life expectancy assumptions are slightly increasing for women, leading to marginally higher liabilities. Safety plans may experience bigger increases due to earlier retirement ages.

Key takeaway: UAL payments are designed to be stable and conservative, providing a reliable foundation for budgeting.

Discount Rate, Inflation, and Salary Assumptions

• The amortization schedule and payment projections are not directly impacted by salary increases, meaning agencies can budget with some conservatism.
• The valuation provides a guide for planning future contributions, allowing agencies to estimate costs and potential savings without immediate changes to UAL payments.

Employee Contributions

• For PEPRA miscellaneous plans, little change is expected in employee contributions.
• Safety plan contributions may increase starting in 2027 due to updated assumptions.
• New hires do not affect the agency’s UAL and start accruing contributions for their own service only.

Strategic Management of Surplus and Risk

• Agencies are encouraged to maintain reserves outside CalPERS to cover unexpected losses or revenue shortfalls.
• Once a cushion is in place, surplus funds can be applied strategically to:
• Reduce interest costs on amortization schedules
• Pay off longer liabilities efficiently
• Protect against market volatility

Key takeaway: Prioritize liquidity and stability first; then apply additional funds to CalPERS contributions for long-term savings.

Budgeting Insights

• Using the 2024 report’s amortization payments provides a conservative starting point for budgeting.
• Actual contributions may be slightly lower due to the 11.6% investment gain realized in the year, though assumption changes may offset some of that benefit.
• Agencies can revisit these numbers when final rates are released in November 2025.

Lightning Round Highlights

• Hiring older vs. younger employees: Minimal impact on normal costs unless a large group shifts the average entry age. No effect on UAL.
• Hiring employees with prior service at another agency: Agencies do not inherit past liabilities. Assets and liabilities remain with the original employer.
• Targeting individual loss bases in consolidated risk-sharing pool plans: Agencies can choose which amortization schedules to pay off but cannot separate contributions by prior benefit structure.

Key Takeaways

1. UAL payments remain stable and predictable, supporting conservative budgeting.
2. Employee contributions may increase modestly for safety plans but are largely unchanged for miscellaneous plans.
3. New hires do not inherit past UAL, maintaining agency-specific liability integrity.
4. Maintaining a reserve outside of CalPERS is critical to manage market volatility.
5. Strategic surplus application allows agencies to reduce long-term costs once a buffer is in place.

Agencies seeking further guidance can contact their TrueComp customer success representative at success@truecomp.com for individualized support and education sessions.