A divided CalPERS board yesterday approved a faster rate hike for the state urged by Gov. Brown, but opposed by unions. A proposal to give struggling cities the option of more time to phase in the rate hike, seven years instead of five, was rejected.
The rate hike to cover the cost of retirees living longer is the third in the last two years, following a lower earnings forecast and a more conservative actuarial method. Many local government rates could increase roughly 50 percent by 2020.
An underfunded CalPERS has about 70 percent of the projected assets needed to pay promised pensions. There were big pension increases and deep employer rate cuts in good times, then huge investment losses during the bad times last decade.
“The board today took important and responsible action to strengthen California’s pension system,” Brown said in a brief news release after the CalPERS board voted 7-to-4 to begin a three-year phase in of the state rate hike July 1.
http://calpensions.com/2014/02/19/calpers-rate-hike-governor-wins-cities-lose/
