CalPERS Increases State’s Contribution for Retiree Benefits by $450M
On Wednesday, CalPERS officials said the pension fund will increase the state's contribution to $4.3 billion for fiscal year 2014-2015, the Sacramento Business Journal reports (Young, Sacramento Business Journal, 4/17).
In February, the CalPERS board voted 7-4 to immediately begin phasing in higher retiree contribution rates to account for the costs associated with longer life spans. Under the plan, CalPERS will hike beneficiaries' rates 5% in 2014 and 85% over two years in 2015 and 2016 (California Healthline, 3/12).
Details of State Contribution Hike
CalPERS this week said it will raise the state contribution rate by more than $450 million starting July 1.
According to the Business Journal, 22% of the pension fund is made up of employer contributions. The state contributes to the fund as the workplace of state employees.
Bill Slaton, chair of the CalPERS finance and administration committee, said, "Rates will continue to rise over the next few years as we gradually phase in our new assumptions, but the costs more adequately reflect what is needed to pay for promised pensions" (Sacramento Business Journal, 4/17).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.