Calpers' board is expected to review the proposal next week, the documents said.
Calpers recently announced that it had flipped to a negative cash flow as retiring baby boomers tapped into the fund and expects the deficit to last for 15 years. Nearly all public pension funds have a negative cash flow, according to the National Association of State Retirement Administrators.
The plan would reduce the fund's return assumption of 7.5 percent. Calpers, the country's largest pension fund, last adjusted its investment target in 2011 when it dropped from 7.75 percent.
The proposal would enable the fund, during periods of significantly high performance, to reduce its assumptions of future investment returns. For example, if investment returns exceeded expectations by 10 percent, Calpers would reduce its expected returns by 0.15 percent the following fiscal year.