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The California Public Employees’ Retirement System (CalPERS) today announced that Fitch Ratings has reaffirmed its highest rating for the pension fund’s Credit Enhancement Program.
Fitch Ratings, a leading global rating agency, gave CalPERS its “AAA” rating for the System’s funding of retirement benefits, financial condition, and available liquidity.
“This rating validates the financial strength of CalPERS,” said Joe Dear, 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:
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The System’s high liquidity cushion;
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Adequate funding even after applying Fitch’s conservative discount rates; and
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CalPERS prudent underwriting guidelines for its program.
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. Fitch Ratings gave its highest possible F1+ rating for CalPERS short-term component.
“Our program provides support for California municipalities and others across the nation while adding value to our investment portfolio,” said Dear.
CalPERS has assets of about $222 billion. The retirement system administers pension benefits for more than 1.6 million active and retired California state, public school, and local public agency employees and their families, and health benefits for more than 1.3 million members, on behalf of 3,000 California public employers. The average CalPERS pension is $2,220 per month. More information is available at www.calpers.ca.gov.
