State contribution to CalPERS to rise by $524 million next year
By Randy Diamond January 12, 2017 9:47 am | Updated
California will contribute $5.3 billion to CalPERS for the fiscal year
starting July 1, up 11% from the current fiscal year, shows a proposed budget by
Gov. Edmund G. Brown Jr.
The state contribution increase is $524 million, which includes $172 million
as a result of the CalPERS boardfs decision in December to reduce the $305.5
billion pension fundfs assumed rate of return to 7.375% from 7.5%, beginning in
July.
The state contribution increase to CalPERS will ultimately go up by $2
billion in the 2019-e20 fiscal year, when the final phase of a rate-of-return
reduction goes into effect, lowering to 7%.
Total state contributions to the California Public Employeesf Retirement
System, Sacramento, are expected to reach $9.7 billion in the 2023-e24 budget
year due to a variety of factors, including state contribution increases and
payroll growth, the budget proposal shows.
California Controller Betty T. Yee said in a statement she was pleased with
the higher state contribution. Ms Yee also holds a seat on the CalPERS board.
gThis will help to stabilize the pension fund as the board continues to work
judiciously to secure public employeesf earned benefits,h she said.
Overall, Mr. Brown has unveiled a $179.5 billion budget for the fiscal year,
up 5% from the current year. The budget must be approved by the state Senate and
Assembly. But the CalPERS contributions cannot be changed because the state
contributions are set by the CalPERS board and cannot be changed by the
Legislature.