The California Public Employees’ Retirement System’s (CalPERS)
2021-22 fiscal year investment returns will impact employer
contribution rates for contracting counties, cities, and special
districts beginning in fiscal year 2024-25. On August 10, 2022,
CalPERS hosted a webinar to discuss the impact of its recently
announced negative 6.1 percent return on investment for
employers. A recording of this webinar is anticipated to be
posted on CalPERS’ website by the end of this week.
With the caveat that these are preliminary estimates, CalPERS
reported that beginning in fiscal year 2024-25, the negative
investment return will result in the following increased
contributions for contracting counties compared with the rates
that will paid in fiscal year 2023-24:
Approximately a 2 to 4 percent increase for miscellaneous
plans.
Roughly a 4 to 6 percent increase for safety plans.
Due to the previous fiscal year’s investment gains, contribution
rates for most counties will be lower in 2023-24, and the rate
increases for 2024-25 are anticipated to increase rates to
approximately the same level as 2022-23, depending on individual
funded status.
As
reported previously, CalPERS attributes the impact on returns
to volatile global financial markets, geopolitical instability,
domestic interest rate hikes, and inflation. The CalPERS Board of
Administration’s Investment Committee will discuss the returns at
its September 19, 2022, meeting. CSAC will keep counties informed
of any new developments and actions.
