Pension fund says rate hike smaller than expected
Business & Real Estate
By Dale Kasler
April 20, 2016 – 5:18 PM
CalPERS approved another round of rate increases Thursday, requiring higher contributions from state agencies and school districts for the 2016-17 fiscal year.
The state’s contribution will increase by an estimated $602 million, to $5.4 billion a year. School districts will be charged an additional $342 million, to a total of nearly $1.7 billion a year. While teachers are covered by CalSTRS, other school employees get their pensions from CalPERS.
It’s the latest in a series of rate hikes implemented by the California Public Employees’ Retirement System in recent years, primarily to cover longer retiree lifespans, salary increases and the growing pool of state and school district employees. CalPERS is also dealing with lingering financial fallout from the 2008 financial crash, which cost the pension fund tens of billions of dollars.
CalPERS is 76 percent funded, which means it has 76 cents on hand for every $1 of long-term obligations.
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