How state and local government budgets will be affected by CalPERS’ trimmed investment expectations

In the four years since California’s largest pension fund recalibrated its investment projections, the annual contribution from state and local governments — in effect, the money paid by taxpayers — has slowly been on the rise.

By the summer of next year, the pace of those payments will quicken, as the California Public Employees’ Retirement System throttles back the expectations of profits earned on its $300-billion portfolio.Those expectations were officially made more conservative on Wednesday by CalPERS’ board of directors, a half-percentage-point decrease in assumed returns over three years that will send shock waves through all sectors of state and local government faced with billions of dollars in new pension costs.

Those expectations were officially made more conservative on Wednesday by CalPERS’ board of directors, a half-percentage-point decrease in assumed returns over three years that will send shock waves through all sectors of state and local government faced with billions of dollars in new pension costs.