Board meeting - May 2022

Unless otherwise specified, meetings will be held at the following location:

CalSTRS Board Room, 100 Waterfront Place, West Sacramento, CA 95605

Public Call Letter - REVISED

All meeting times are approximate depending upon the end of the previous meeting.

May 4, 2022

Regular Meeting - 9:00 a.m.

Item 1 - Approval of Agenda

Session: Open | Type: Action | Presenter: Chairperson

Item 01 Item 01 - Attachment 1 - May 2022 Regular Meeting Agenda

Item 2 - Chief Executive Officer Report

Session: Open | Type: Information | Presenter: Cassandra Lichnock

Item 02

Item 3 - Annual Board Chair and Vice-Chair Elections

Session: Open | Type: Action | Presenter: Chairperson

Item 03

Item 4a - Actuarial Valuation of the Defined Benefit Program and Setting of Contribution Rates

Session: Open | Type: Action | Presenter: David Lamoureux/ Rick Reed and Nick Collier/Scott Preppernau, Milliman

Item 04a Item 04a - Attachment 1 - June 30, 2021 Actuarial Valuation Report for the Defined Benefit Program Item 04a - Attachment 2 - Proposed Resolution for the State Supplemental Contribution Rate Item 04a - Attachment 3 - Proposed Resolution for the Employer Supplemental Contribution Rate Item 04a - Attachment 4 - Proposed Resolution for the Normal Cost Rate for CalSTRS 2% at 62 Members Item 04a - PowerPoint

Item 4b - Actuarial Valuation of the Defined Benefit Supplement Program and Consideration for the Adoption of an Additional Earnings Credit

Session: Open | Type: Action | Presenter: David Lamoureux/ Rick Reed and Nick Collier/Scott Preppernau, Milliman

Item 04b Item 04b - Attachment 1 - June 30, 2021 Actuarial Valuation for the Defined Benefit Supplement Program Item 04b - Attachemnt 2 - Proposed Resolution for the Adoption of an Additional Earnings Credit Item 04b and 04c - PowerPoint

Item 4c - Actuarial Valuation of the Cash Balance Benefit Program and Consideration for the Adoption of an Additional Earnings Credit

Session: Open | Type: Action | Presenter: David Lamoureux/ Rick Reed and Nick Collier/Scott Preppernau, Milliman

Item 04c Item 04c - Attachment 1 - June 30, 2021 Actuarial Valuation for the Cash Balance Benefit Program Item 04c - Attachment 2 - Proposed Resolution for the Adoption of an Additional Earnings Credit

Item 5 - Review of Lump Sum Death Benefit

Session: Open | Type: Action | Presenter: David Lamoureux and Rick Reed

Item 05 Item 05 - Attachment 1 - Milliman’s Lump Sum Death Benefit Level Analysis Item 05 - Attachment 2 - Proposed Resolution for the Adoption of the Lump Sum Death Benefit

Item 6 - Actuarial Projection for the Supplemental Benefit Maintenance Account

Session: Open | Type: Action | Presenter: David Lamoureux and Rick Reed

Item 06 Item 06 - Attachment 1 - Milliman’s Projection of SBMA Funding Sufficiency Item 06 - Attachment 2 - Proposed Resolution for the Adoption of the SBMA Purchasing Power Percentage Item 06 - PowerPoint

Item 7 - Options on the Use of the Supplemental Benefit Maintenance Account

Session: Open | Type: Action | Presenter: David Lamoureux and Rick Reed

Item 07 Item 07 - Attachment 1 - Analysis of Potential SBMA Plan Changes (Analysis by Milliman)

Item 8 - State and Federal Legislation

Session: Open | Type: Action | Presenter: Joycelyn Martinez-Wade

Item 08 Item 08 - Attachment 1 - SB 1328 (McGuire) Item 08 - Attachment 2 - SB 1343 (Leyva) Item 08 - Attachment 3 - SB 1402 (Umberg) Item 08 - Attachment 4 - Potential Legislation Item 08 - Attachment 5 - Legisaltive Matrix

Item 9 - Regular Meeting Work Plan Input for FY 2022-2023

Session: Open | Type: Information | Presenter: Cassandra Lichnock

Item 09 - REVISED Item 09 - Attachment 1 - Proposed Regular Meeting 2022-23 Work Plan

Item 10a - Committee Reports

Investment Committee
Appeals Committee
Audits and Risk Management Committee
Benefits and Services Committee
Board Governance Committee
Compensation Committee

Session: Open | Type: Consent Action | Presenter: Chairperson

Item 10b - Approval of Minutes of the March 4, 2022, Regular Meeting – Open Session

Session: Open | Type: Consent Action | Presenter: Chairperson

Item 10b - Revised

Item 10c - Board Member Education

Session: Open | Type: Consent Action | Presenter: Chairperson

Item 10c - Revised

Item 10d - Contracts Requiring Board Approval

Session: Open | Type: Consent Action | Presenter: Chairperson

Item 10d

Item 10e - Adoption of Contribution Rates and Interest Rates for FY 2022-23

Session: Open | Type: Consent Action | Presenter: Chairperson

Item 10e Item 10e - Attachment 1 - Regular Interest Rate – Defined Benefit Program Item 10e - Attachment 2 - Credited Interest Rate – Defined Benefit Program Item 10e - Attachment 3 - Minimum Interest Rate – Cash Balance Benefit Program Item 10e - Attachment 4 - Minimum Interest Rate – Defined Benefit Supplement Program Item 10e - Attachment 5 - Employer Contribution Rate for Elected Officials of Employee Organizations Item 10e - Attachment 6 - Employer Contribution Rate for Elected Officials of Employee Organizations Item 10e - Attachment 7 - Permissive Service Contribution Rates – Defined Benefit Program

Item 11 - Actuarial Valuation of the Medicare Premium Payment Program

Session: Open | Type: Consent Information | Presenter: Chairperson

Item 11 Item 11 - Attachment 1 - June 30, 2021 Actuarial Valuation for the Medicare Premium Payment Program

Item 12 - Administrative Procedure Changes Pursuant to CEO Delegation

Session: Open | Type: Consent Information | Presenter: Chairperson

Item 12

Item 13 - Items Referred by Committee for Board Decision

Session: Open | Type: Information | Presenter: Chairperson

Item 14 - New Business / Review of Information Requests

Session: Open | Type: Information | Presenter: Chairperson

Item 15 - Draft Agenda for Next Meeting

Session: Open | Type: Information | Presenter: Chairperson

Item 15

Item 16 - Opportunity for Statements from the Public

Session: Open | Type: Information | Presenter: Chairperson

Item 17 - Approval of Minutes of the March 4, 2022, Regular Meeting – Closed Session (Gov. Code, sec. 11126)

Session: Closed | Type: Consent Action | Presenter: Chairperson

Item 18 - Committee Reports (Gov. Code, Sec. 11126)

Session: Closed | Type: Consent Information | Presenter: Chairperson

Item 19 - Setting of CEO/CIO Performance Targets/Compensation for 2022-23 Performance Year (Gov. Code, sec 11126(a), (b), (g)1))

Session: Closed | Type: Action | Presenter: Chairperson

Item 20 - Chief Executive Officer Briefing on Performance and Personnel Issues (Gov. Code, sec. 11126(a), (b), (g))

Session: Closed | Type: Information | Presenter: Cassandra Lichnock

Item 21 - Confer with and Receive Advice from Legal Counsel Regarding Pending Litigation (Gov. Code, sec. 11126(e))

Session: Closed | Type: Information | Presenter: Brian J. Bartow

Benefits & Services Committee - 2:45 p.m.

Item 1 - Approval of Committee Agenda

Session: Open | Type: Action | Presenter: Chairperson

Item 01 Item 01 - Attachment 1 - Benefits & Serevices Committee May 2022 Agenda

Item 2 - Approval of Minutes of the January 27, 2022, Benefits and Services Committee Meeting – Open Session

Session: Open | Type: Consent Action | Presenter: Chairperson

Item 02

Item 3 - Member Segmentation Study

Session: Open | Type: Information | Presenter: Tom Buffalo

Item 03 Item 03 - PowerPoint

Item 4 - Employer Engagement and Outreach

Session: Open | Type: Information | Presenter: Jeff Zimmer

Item 04 Item 04 - PowerPoint

Item 5 - Committee Work Plan Input for FY 2022-2023

Session: Open | Type: Information | Presenter: Bill Perez

Item 05 Item 05 - Attachment 1 - Committee Work Plan for FY 2022-2023

Item 6 - Review of Committee Charter

Session: Open | Type: Information | Presenter: Bill Perez

Item 06 Item 06 - Attachment 1 - Commitee Charter

Item 7 - Review of Information Requests

Session: Open | Type: Information | Presenter: Chairperson

Item 8 - Draft Agenda for the Next Committee Meeting

Session: Open | Type: Information | Presenter: Chairperson

Item 08

Item 9 - Opportunity for Statements from the Public

Session: Open | Type: Information | Presenter: Chairperson

May 5, 2022

Investment Committee - 8:30 a.m.

Item 1 - Approval of Committee Agenda

Session: Open | Type: Action | Presenter: Chairperson

Item 01 Item 01 - Attachment 1 - Investment Committee May 2022 Agenda

Item 2 - Opportunities for Statements from the Public

Session: Open | Type: Information | Presenter: Chairperson

Item 3 - Net Zero Strategy – Progress and Planning Update

Session: Open | Type: Information | Presenter: Chairperson

Item 03 Item 03 - Attachment 1 - CalSTRS Net Zero Pledge Background Item 03 - Attachment 2 - CalSTRS Net Zero Portfolio Emissions Pledge Item 03 - Attacment 3 - Recent Net Zero Communications Activity Item 03 - PowerPoint

Item 4a - Diversity in Management of Investments - AB 890 Implementation Plan

Session: Open | Type: Action | Presenter: LaShae Badelita

Item 04a Item 04a - Attachment 1 - AB 890 Reporting Requirements Item 04a - Attachment 2 - AB 890 Emerging Manager Definition Item 04a & 04b - PowerPoint

Item 4b - Diversity in Management of Investments - Diversity Report and Strategic Roadmap Update

Session: Open | Type: Information | Presenter: LaShae Badelita

Item 04b

Item 5 - Collaborative Model 2.0 – Opportunities Portfolio

Session: Open | Type: Information | Presenter: Scott Chan

Item 05 Item 05 - PowerPoint

Item 6 - Chief Investment Officer’s Report – Open Session

Session: Open | Type: Information | Presenter: Christopher Ailman

Item 06

Session: Open | Type: Information | Presenter: Scott Chan

Item 06 - PowerPoint

Item 7 - Committee Work Plan Input for FY 2022-2023

Session: Open | Type: Consent Information | Presenter: Chairperson

Session: Open | Type: Information | Presenter: Scott Chan

Item 07

Item 8 - Approval of Minutes of the March 3, 2022,Investment Committee Meeting – Open Session

Session: Open | Type: Consent Action | Presenter: Chairperson

Item 08

Item 9 - Real Estate Consultant Request for Proposal

Session: Open | Type: Consent Action | Presenter: Chairperson

Item 09 Item 09 - Attachment 1 - Real Estate Board Consultant Request for Proposal Item 09 - Attachment 2 - Resolution

Item 10 - Investment Committee Charter Review

Session: Open | Type: Consent Action | Presenter: Chairperson

Item 10 Item 10 - Attachment 1 - Current Investment Committee Charter

Item 11 - Review of Information Requests

Session: Open | Type: Information | Presenter: Chairperson

Item 12 - Draft Agenda for the Next Committee Meeting

Session: Open | Type: Information | Presenter: Chairperson

Item 12

Item 13 - Tactical Investment Strategy Discussion (Gov. Code, sec. 11126(c)(16))

Session: Closed | Type: Information | Presenter: Investment Staff and Consultants

Item 14 - Collaborative Model Strategy Discussion

Session: Closed | Type: Information | Presenter: Scott Chan

Item 15 - Confer with and Receive Advice from Legal Counsel Regarding Pending Litigation (Gov. Code, sec. 11126(e))

Session: Closed | Type: Information | Presenter: Brian J. Bartow

Item 16 - Director of Investment Services – Semi-Annual Compliance Report (Gov. Code, sec. 11126(c)(16))

Session: Closed | Type: Information | Presenter: April Wilcox and Shifat Hasan

Item 17 - Approval of Minutes of the March 3, 2022, Investment Committee Meeting – Closed Session (Gov. Code, sec 11126)

Session: Closed | Type: Consent Action | Presenter: Chairperson

Board Governance Committee - 2:30 p.m.

Item 1 - Approval of Committee Agenda

Session: Open | Type: Action | Presenter: Chairperson

Item 01 Item 01 - Attachment 1 - Board Governance Committee May 2022 Agenda

Item 2 - Approval of the Minutes of the January 27, 2022, Board Governance Committee Meeting – Open Session

Session: Open | Type: Consent Action | Presenter: Chairperson

Item 02

Item 3 - Approval of Draft Board Operative Principles

Session: Open | Type: Consent Action | Presenter: Chairperson

Item 03 Item 03 - Attachment 1 - Draft Operative Principles

Item 4 - Continuation of Board and Committee Meeting Format Discussion

Session: Open | Type: Action | Presenter: Amy McDuffee, Catherine Jackson, Mosaic Governance Advisors

Item 04 Item 04 - Attachment 1 - Draft Board and Committee Workplans FY 2022-23 Item 04 - Attachment 2 - Consensus Outcomes of Board 2022-25 Strategic Plan Priorities Discussion Item 04 - Attachment 3 - FY 2022-23 Board Meeting Calendar Item 04 - PowerPoint

Item 5 - Discussion of Proposed Changes to Board Materials Agenda Item Writeup Template

Session: Open | Type: Information | Presenter: Amy McDuffee, Catherine Jackson, Mosaic Governance Advisors

Item 05

Item 6 - Committee Work Plan Input for FY 2022-2023

Session: Open | Type: Information | Presenter: Brian J. Bartow

Item 06 Item 06 - Attachment 1 - Draft Board Governance Work Plan 2022-2023

Item 7 - Review of Information Requests

Session: Open | Type: Information | Presenter: Chairperson

Item 8 - Draft Agenda for Next Committee Meeting

Session: Open | Type: Information | Presenter: Chairperson

Item 08

Item 9 - Opportunity for Statements from the Public

Session: Open | Type: Information | Presenter: Chairperson

May 4, 2022

Item 1 - Approval of Agenda

Item 2 - Chief Executive Officer Report

Item 3 - Annual Board Chair and Vice-Chair Elections

Item 4a - Actuarial Valuation of the Defined Benefit Program and Setting of Contribution Rates

Item 4b - Actuarial Valuation of the Defined Benefit Supplement Program and Consideration for the Adoption of an Additional Earnings Credit

Item 4c - Actuarial Valuation of the Cash Balance Benefit Program and Consideration for the Adoption of an Additional Earnings Credit

Item 5 - Review of Lump Sum Death Benefit

Item 6 - Actuarial Projection for the Supplemental Benefit Maintenance Account

Item 7 - Options on the Use of the Supplemental Benefit Maintenance Account

Item 8 - State and Federal Legislation

Item 9 - Regular Meeting Work Plan Input for FY 2022-2023

Item 10a - Committee Reports

Item 10b - Approval of Minutes of the March 4, 2022, Regular Meeting – Open Session

Item 10c - Board Member Education

Item 10d - Contracts Requiring Board Approval

Item 10e - Adoption of Contribution Rates and Interest Rates for FY 2022-23

Item 11 - Actuarial Valuation of the Medicare Premium Payment Program

Item 12 - Administrative Procedure Changes Pursuant to CEO Delegation

Item 13 - Items Referred by Committee for Board Decision

Item 14 - New Business / Review of Information Requests

Item 15 - Draft Agenda for Next Meeting

Item 16 - Opportunity for Statements from the Public

Item 17 - Approval of Minutes of the March 4, 2022, Regular Meeting – Closed Session (Gov. Code, sec. 11126)

Item 18 - Committee Reports (Gov. Code, Sec. 11126)

Item 19 - Setting of CEO/CIO Performance Targets/Compensation for 2022-23 Performance Year (Gov. Code, sec 11126(a), (b), (g)1))

Item 20 - Chief Executive Officer Briefing on Performance and Personnel Issues (Gov. Code, sec. 11126(a), (b), (g))

Item 21 - Confer with and Receive Advice from Legal Counsel Regarding Pending Litigation (Gov. Code, sec. 11126(e))

Item 1 - Approval of Committee Agenda

Item 2 - Approval of Minutes of the January 27, 2022, Benefits and Services Committee Meeting – Open Session

Item 3 - Member Segmentation Study

Item 4 - Employer Engagement and Outreach

Item 5 - Committee Work Plan Input for FY 2022-2023

Item 6 - Review of Committee Charter

Item 7 - Review of Information Requests

Item 8 - Draft Agenda for the Next Committee Meeting

Item 9 - Opportunity for Statements from the Public

May 5, 2022

Item 1 - Approval of Committee Agenda

Item 2 - Opportunities for Statements from the Public

Item 3 - Net Zero Strategy – Progress and Planning Update

Item 4a - Diversity in Management of Investments - AB 890 Implementation Plan

Item 4b - Diversity in Management of Investments - Diversity Report and Strategic Roadmap Update

Item 5 - Collaborative Model 2.0 – Opportunities Portfolio

Item 6 - Chief Investment Officer’s Report – Open Session

Item 7 - Committee Work Plan Input for FY 2022-2023

Item 8 - Approval of Minutes of the March 3, 2022,Investment Committee Meeting – Open Session

Item 9 - Real Estate Consultant Request for Proposal

Item 10 - Investment Committee Charter Review

Item 11 - Review of Information Requests

Item 12 - Draft Agenda for the Next Committee Meeting

Item 13 - Tactical Investment Strategy Discussion (Gov. Code, sec. 11126(c)(16))

Item 14 - Collaborative Model Strategy Discussion

Item 15 - Confer with and Receive Advice from Legal Counsel Regarding Pending Litigation (Gov. Code, sec. 11126(e))

Item 16 - Director of Investment Services – Semi-Annual Compliance Report (Gov. Code, sec. 11126(c)(16))

Item 17 - Approval of Minutes of the March 3, 2022, Investment Committee Meeting – Closed Session (Gov. Code, sec 11126)

Item 1 - Approval of Committee Agenda

Item 2 - Approval of the Minutes of the January 27, 2022, Board Governance Committee Meeting – Open Session

Item 3 - Approval of Draft Board Operative Principles

Item 4 - Continuation of Board and Committee Meeting Format Discussion

Item 5 - Discussion of Proposed Changes to Board Materials Agenda Item Writeup Template

Item 6 - Committee Work Plan Input for FY 2022-2023

Item 7 - Review of Information Requests

Item 8 - Draft Agenda for Next Committee Meeting

Item 9 - Opportunity for Statements from the Public

Website Accessibility Statement