State contribution to CalPERS expected to rise next fiscal year
SACRAMENTO -- The state government’s contribution to employee pensions is expected to jump to $3.7 billion from $3.5 billion in the fiscal year that starts July 1.
On Tuesday, a committee of the board of the California Public Employees’ Retirement System recommended the increase as well as a $29-million drop to $1.2 billion for non-teaching school and community college district workers.
Even with the increase, the state’s contribution is lower than the $3.9 billion paid in fiscal 2010-2011, CalPERS said.
The biggest factor in next spending year’s rise was a board decision in March to lower the fund’s expected average annual rate of return on investments to 7.5% from 7.75%, CalPERS said.
The hike, though relatively small, creates an added financial burden for recession-wracked California, said Priya Mathur, chair of CalPERS’ Pension and Health Benefits Committee.
“While the increase is less than half of 1% of the general fund budget, we know that any increase is difficult for our state’s finances right now,” she said.
The full 13-member CalPERS board will vote on the proposed increase Wednesday.
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