The state’s public pension system, Calpers, recently lowered its sights regarding future investment returns. That could cost California cities and public agencies—including those in the Morongo Basin—lots of money. Reporter David Haldane explains…
If you work for a California municipality or public agency, your employer may have to pick up a bigger tab for your future retirement.
That’s because the board of the state’s public pension system—Calpers—has voted to lower its expectations for future investment returns from 7.5 percent to just 7 percent. A giant with roughly $300 billion in assets, Calpers manages the investments for more than 1.7 million current and future retirees. Lowering its expectations for returns puts more pressure on participating cities to make up the difference.
The actual cost to municipalities, of course, will depend on the actual returns. But if Calpers projections are correct, according to Twentynine Palms City Manager Frank Luckino, the added cost to that city alone could be about $30,000 over the next two years.
Multiply that into the future by the numbers of cities affected, and the cost could be significant.
