CalPERS’ Funding Level Increased to 77% in 2014, Report Finds
CalPERS' funding level increased to 77% by the end of fiscal year 2014, nearing what experts say is an adequate level for pension funds, according to a new CalPERS financial report, the Los Angeles Times reports (Lifsher, Los Angeles Times, 1/13). CalPERS' FY 2014 funding level marks an increase from 69.8% in 2013.
Details of CalPERS Funding
With the 77% funding level, CalPERS has more than three-quarters of the money it needs to pay off its pension obligations. However, some say that range is too low (Sforza/Kyle, Orange County Register, 1/14).
Meanwhile, the financial report showed that CalPERS exceeded goals with an 18.4% return on investments for FY 2014, up from an average of 10.4% during the previous three years (Los Angeles Times, 1/13).
Reasons Behind Increased Funding Level
The Orange County Register notes that CalPERS' improved finances are due in part to increased taxpayer contribution rates (Orange County Register, 1/14).
California's annual contribution will increase from $3.8 billion to $5 billion because of a rate hike approved in April 2014, according to the Sacramento Bee.
Dan Pellissier, president of California Pension Reform, said, "That 23% that's still unfunded represents billions of dollars that will be paid by future taxpayers" (Kasler, Sacramento Bee, 1/13).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.