CalPERS currently assumes that its pension portfolio will earn 7% per annum. The Regents' assumption for UCRP, in contrast, is 6.75%. Both systems have lowered their assumption over time. Michael Cohen, the CFO of CalPERS (and a UC Regent) has written an op ed in CalMatters which hints that CalPERS is edging toward dropping its assumption to something below 7%.* If it dropped the rate below 6.75%, the Regents would be under pressure to do the same.
It needs to be emphasized that making or changing assumptions does not affect what the actual future returns will be. Thus, the actual unfunded liability is not affected by changes in assumptions. However, there are behavioral implications of dropping the assumed rate in that the estimated unfunded liability increases which triggers pressure for increased contributions and/or decreases in promised benefits for new hires.
Any action by CalPERS, even if it just matches the Regents' current 6.75%, is likely to raise the issue of whether UC and the Regents should change its assumption. UCRP is a huge fund, but it is a mouse compared to the CalPERS elephant. As a mouse, we tend to be affected by what the elephant does without having much influence on the elephant. So, what goes on at CalPERS needs watching.
CalPERS is a complex organization with (I am being very gentle here), a history of governance issues.** So, how it might go about considering changing its assumed earnings rate is unknown. Cohen, as a former finance director for Jerry Brown, is surely aware of the history. It's hard to believe that he wrote the op ed just as an instrument for public education. He likely believes the rate should be lowered. How much, of course, is unknown.
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**Example of a recent brouhaha at CalPERS:
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