HAPPENING: CalPERS to Lower Discount Rate to 7%
Posted on 12/21/2016
The Board of the California Public Employees Retirement System (CalPERS) approved a motion to lower the fund’s discount rate of return from 7.5% to 7%, over a three-year time frame. The reasons are manifold. CalPERS last lowered its expected return in 2012, lowering it from 7.75% to 7.5%. A reduction in discount rates means that California cities and taxpayers will end up owing more money for retirement plans. Behind the scenes, California Governor Jerry Brown, organized labor unions and CalPERS staff, negotiated the recommended 7% return figure.
Rate Drop Plan
| Fiscal Year | Rate |
|---|---|
| 2017-2018 | 7.375% |
| 2018-2019 | 7.250% |
| 2019-2020 | 7.000% |