As part of a shift toward less optimistic expectations for investment returns to pay for government worker pensions, board members of the California Public Employees Retirement System voted Tuesday to require an almost $6.3-billion payment from the state budget in the fiscal year that begins on July 1.
The action, which could receive final approval on Wednesday, reflects a gradually higher annual contribution to public employee pensions by the state and from local governments across California. In 2016, CalPERS approved a half-percentage point decrease in its official estimate of the long-term investment return on its $353.3-billion portfolio. That shift was designed to happen over several years, in hopes it would lessen the financial shock of shifting more of the costs onto government employers. The highest costs are also, in part, a reflection of increases in the size of the state’s payroll.
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