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Last week Thursday, the Wall Street Journal highlighted the impact of investment losses on Calpers in this story.
Unless returns improve significantly, it looks like Calpers will require cities, counties, school districts and other public agencies to increase contribution rates by 2 percent to 4 percent of payroll beginning in July 2010.
In the 15-week period from the end of June through October 10, Calpers assets have gone down more than 20 percent, or at least $48 billion. If the current trend remains through the end of June next year, Calpers’ funding status will go from the 92 percent level it reported at the end of the 2008 fiscal year, to 68 percent.
Locally, the city pension system’s assets have also declined approximately 15 percent within the past year if we accept the figures reported in this this U-T story.
Déjà vu, anyone?
The average employer contribution rate for Calpers members is 13 percent of payroll. Let’s see what a 2 percent- to 4 percent- increase of payroll might look like for a few government entities.
I’ll start with the San Diego Unified School District if only because I’m curious to see how long it takes me to find what I’m looking for in the new budget format we all made a big fuss over.
Check back for the results of my information gathering (and additional insight on local government pension benefits that might make you a little queasy), in my next post.