California Gov. Pete Wilson signed a bill appropriating $332.8 million in court-ordered, back-interest payments to the $140 billion California Public Employees' Retirement System, Sacramento.
The appropriation resulted from $910 million in missed contributions by the state to CalPERS during 1992 and 1993 that were repaid by the state in 1997. Both payments were the result of a 1994 lawsuit filed by CalPERS against the state seeking repayment of missed contributions.
William Crist, CalPERS board president, said the bill shows that no employer can ``shortchange'' employees. But Jake Petrosino, research director for the PERS Betterment Committee, a pension watchdog group, said the state paid only 8.75% compound annual interest on the missed payments, while the plan has been making an annualized return of about 19%. The interest differential means the plan ``got screwed'' by the state, said Mr. Petrosino.