Fitch Ratings, a leading global rating agency, gave CalPERS a "AAA" rating for the System’s stellar investment operations and strong funding of retirement benefits.
"This rating validates the financial strength of CalPERS," said Mark Anson, CalPERS Chief Investment Officer. "Our members and employers can be proud to be part of such a sound organization."
CalPERS rating was based on several factors in Fitch's assessment, including:
- The System's strong investment results;
- A long history of stable employer contributions and benefit levels;
- Contracts with more than 1,400 local governments that contribute and maintain the long- and short-term financial viability of the pension fund to meet ongoing retirement benefits; and
- The pension fund's conservative assumption of 7.75 percent return on investments.
CalPERS credit enhancement program was approved by the pension fund's Board in February 2003. It is designed to help municipalities around the country that want to sell bonds to the market by getting backing from the "AAA" rated pension fund. CalPERS in turn charges a fee for lending its good credit.
"Our program will provide support for California municipalities and others across the nation while adding value to our investment portfolio," said Anson.
CalPERS program will be administered by The Bank of New York, its service agent and strategic partner. It is expected to begin in early October.
Fitch Ratings gave its highest possible F1+ rating for CalPERS short-term component. It cited more than $2 billion in average daily cash balances, highly liquid assets that the System can tap to cover draws, and the System's high level of actuarial funding.
CalPERS has assets totaling more than $166 billion. The System provides retirement and health benefits to more than 1.4 million State and local public employees and their families. For more information about CalPERS, please visit www.calpers.ca.gov.
