News

Extra, extra, read all about RPEA and related news. 

 

"Breaking News: CalPERS funded status increased to an estimated 73%+ at the end of 2019

"Breaking News:  CalPERS funded status increased to an estimated 73%+ at the end of 2019 based on announcement we just received from Marcie Frost, CalPERS CEO.  It had been languishing at 70% for several years but recently moved up due to the stock market run-up over the past six months."

IRS issues standard mileage rates for 2020

IRS issues standard mileage rates for 2020

WASHINGTON — The Internal Revenue Service today issued the 2020 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on Jan. 1, 2020, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

  • 57.5 cents per mile driven for business use, down one half of a cent from the rate for 2019.
  • 17 cents per mile driven for medical or moving purposes, down three cents from the rate for 2019, and
  • 14 cents per mile driven in service of charitable organizations.

The business mileage rate decreased one half of a cent for business travel driven and three cents for medical and certain moving expense from the rates for 2019. The charitable rate is set by statute and remains unchanged.

Ms. Stacie Vilares has been appointed to the CalPERS Board by Gov. Newsom

"Ms. Stacie Vilares has been appointed to the CalPERS Board by Gov. Newsom to fill the insurance representative seat vacated by Dana Hollenger.  Ms. Vilares has broad experience in investment firms and insurance matters.  She immediately demonstrated insight into CalPERS investment affairs in her first Board meeting.  We expect to see her become a very astute member of the Board."  

CalPERS Board of Administration Governance Policy

https://www.calpers.ca.gov/docs/board-governance-policy.pdf

The CalPERS Board has adopted some new rules...

The CalPERS Board has adopted some new rules that reduce the number of meetings committees hold to quarterly (more if needed) and the Board will meet six times each year.  There will be a Board workshop offsite meeting and a stakeholders meeting with the Board once a year. This new schedule reduces transparency, accountability, and the number of opportunities for stakeholders (specifically retirees) to communicate their concerns about proposals and other issues.  A code of conduct that would have restrained free speech by Board members was not adopted but it was referred back to the committee for refinement.  The following link is the first press report that questions the motives of the Sacramento Bee in articles about JJ Jelincic:

https://www.citywatchla.com/index.php/2016-01-01-13-17-00/los-angeles/18301-is-the-sacramento-bee-a-newspaper-or-a-front-for-the-calpers-staff

Al Darby  

Breaking News on Pensions

In a recent Boston College study, researchers found that Pension Boards with at least two members who possess extensive investment or actuarial experience cause their pension fund to increase investment return by up to 1.25%.  This is a very significant number and strongly supports the election of JJ Jelincic, an investment manager, to the CalPERS Board Retiree Seat. 

Breaking News – AMBIA exceeds recruitment quota…..

For the 2018/19 fiscal year.   AMBIA brought us 1721 new members this year which is 190 more than the quota.  We recruited 688 more from our own efforts. 

AMBIA is also announcing the creation of a sales force of six people in California effective August 1, 2019.

CalPERS has found a replacement to head its Private Equity Investment Unit

“After almost two years, CalPERS has found a replacement to head its Private Equity Investment Unit.  The new appointee, Greg Ruiz, has a strong private equity resume and comes will important Silicon Valley private equity experience.  While this segment of the investment universe at CalPERS has performed well during this two-year period by continuing to outperforming public equity, this new hire and new emphasis on co-investing should propel this unit to an even more productive level. ”

Al Darby

Gov. Newsom has appointed Lisa Middleton

“Gov. Newsom has appointed Lisa Middleton, a Palm Springs Councilwoman, to replace Bill Slaton on the CalPERS Board.  This seat is held by an active elected official from a contract agency.   When a Board member in this seat is no longer an elected official from a contract agency, a qualified new Board is found for that seat.  Ms. Middleton was a36-year employee of the State Compensation Insurance Fund and retired as a V.P. over the fraud unit”. 

"California Rule"

"California Rule"

The long-awaited State Supreme Court decision that threatened the “California Rule” has been issued and the court has held that the rule is still intact.  This rule has been in-place since the 1950’s and has always held that pension benefits that exist in the contract between a public employer and CalPERS at the time an employee is hired cannot be altered in such a way that reduces the value of that person’s pension at retirement.   This court ruling did permit “perks” (special benefits awarded by the state legislature but not “vested rights”) or special benefits bestowed by the legislature to be withdrawn by the legislature. 

The case before the court was that of “Airtime,” a special benefit awarded by the legislature in 2003 to Cal Fire and other safety employees to augment their pension allowance, was determined by the court to be a perk and thereby not a vested right.  This was a benefit that the employee had funded on his/her own and not an employer funded benefit, but the court still found this to be a perk that could be lawfully terminated in the 2012 pension reform act.

Fortunately, the California Rule was left intact by this decision which means that contracted benefits between CalPERS and public employers that exist when a person is hired must be maintained and, if altered, the value of the altered benefit must be of equal value in the replacement benefit.  The 2012 pension reform act (PEPRA) reduced benefits for new hires on or after 1/1/2013 but did not alter contracted benefits for existing employees (referred to as “classic employees”).  

Two other cases regarding pension "spiking" are still before this court. A decision is expected in early 2020 regarding these cases. Current retirees are not directly affected by these decisions, but one case could affect our COLA and PPPA benefits if the Court weakens the California Rule.

News from CalPERS

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