CalPERS Calls for California To Chip in $600M More Next Year
On Tuesday, a California Public Employees Retirement System committee voted to increase the state's contribution to employee retirement benefits by $600 million in the next fiscal year, the AP/San Jose Mercury News reports.
CalPERS manages retirement and health benefits for 1.6 million public employees in California.
The pension system lost $55.2 billion, or about a quarter of its value, during FY 2008-2009 (AP/San Jose Mercury News, 5/18).
Rate Hike Details
CalPERS' Benefits and Program Administration Committee unanimously voted to impose the 18% hike on annual state contributions to the pension system, bringing the state's total share to $3.88 billion annually.
On Wednesday, CalPERS' full Board of Administration is expected to vote on the proposal.
Possible Impact on Budget
CalPERS' proposed contribution is higher than the amount Gov. Arnold Schwarzenegger (R) assumed in his recently released budget proposal.
California law requires the state to pay the contribution amount set by the pension system.
Impetus for Pension Reform?
Schwarzenegger said Tuesday's committee vote provides further evidence that California's pensions are on an "unsustainable" path. He added that state spending on pensions diverts funds from health care and other areas.The governor is supporting a bill (SB 919) by Sen. Dennis Hollingsworth (R-Murrieta) that would reduce pension benefits for new state employees (Kasler, Sacramento Bee, 5/19). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.