CalSavers Staff, Investment Consultant Suggest Maintaining Current Investment Approach

The staff of the CalSavers Retirement Savings Board and its investment consultant have suggested that the Board readopt the existing investment policy statement (IPS). 

The Board is required under California law review its IPS annually during a public meeting. At its Dec. 13, 2021 meeting, the staff and investment consultant, Meketa Investment Group, recommended that the board readopt the IPS as amended at the Dec. 7, 2020 meeting. At that meeting, the amendments the Board made to the IPS included adding long-dated target date funds for the youngest participants. 

Third Quarter Results

The Board reports that during the third quarter of 2021, contributions made were concentrated in the Money Market Fund (approximately 17% of net contributions, or $6.3 million) and Target Date Retirement Funds (82% of net contributions into the program, or $31.3 million).

Drilling down, the Board reports that during the third quarter, results for investments of CalSavers funds were as follows:

Target Date Funds

Quarter-to-date returns ranged from -1.7% to -0.1% with the shorter-dated funds’ performance benefiting most given their higher allocations to risk averse assets, particularly fixed income. 

Passive Funds 

• The Core Bond Index Fund returned -0.2% net of all fees for the quarter, versus the index’s return of 0.1%. 
• The Global Equity Fund returned -1.1% net of all fees for the quarter, versus the index’s return of -0.7%. 

Active Funds 

• The Money Market Fund returned 0.2% net of all fees. Money market rates remained at record lows and held near 0%. Market data, the Board says, indicates that rates likely will remain depressed through the end of the year. 
• The Sustainable Balanced Fund returned -1.0% net of fees for the quarter versus the index’s return of -1.0%. 

Hold the Line?

The minutes of the Dec. 13 meeting state that based on the conclusion of staff and Meketa Investment Group that no further revisions are necessary or desirable at this time, the CalSavers Retirement Savings Board will consider readopting its IPS with no revisions to the current version.