CA Gov't Code Section 100013

The board shall ensure that an insurance, annuity, or other funding mechanism is in place at all times that protects the value of individuals’ accounts. The funding mechanism shall protect, indemnify, and hold the state harmless at all times against any and all liability in connection with funding retirement benefits pursuant to this title. The costs of the funding mechanism shall be paid out of the funds held in the trust and shall not be attributed to the administrative costs of the board in operating the trust.