A Los Angeles pension board voted Tuesday to scale back its long-range investment projections, creating yet another budget problem for the city’s elected officials.
The City Employees’ Retirement System board, which oversees pension benefits for thousands of city workers, voted unanimously to cut its assumed rate of return — the yearly earnings expected from the agency’s investment portfolio — to 7.25%, down from 7.5%.
The decision is expected to shift $38 million in retirement costs onto the general fund budget, consuming funds that would otherwise pay for basic services. And it comes at a time of increased concern over the city’s growing pension burden.
Another pension agency, which oversees benefits for thousands of retired firefighters and police officers, recently reduced its own rate of return and recalculated the expected lifespan of its beneficiaries. Meanwhile, growth in the overall city payroll is also expected to push pension payments upward.
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