CalPERS Lowers Assumed Rate of Return
Employers Will Contribute More as Reduction is Phased In
In an overall effort to strengthen the long-term sustainability of what is the largest public employees retirement system in the country, the CalPERS Board of Administration approved a recommendation to gradually lower the “discount rate” during its December 21 meeting. Counties will recall that the discount rate is the percentage of expected returns on investments made by CalPERS. A lower discount rate means that employers, including counties, will be contributing more to the retirement fund over the next three years.
The current discount rate is 7.5 percent. It will gradually decrease over the next three years to 7.365 percent for fiscal year 2018-19, 7.25 percent for fiscal year 2019-20, and 7.0 percent for fiscal year 2020-21.