CalPERS board has approved changes to smooth contribution rates employers pay to the $186.9 billion pension fund. Overall, the changes should reduce contribution volatility by up to 50%, said Darin Hall, spokesman for the California Public Employees' Retirement System, Sacramento.
The changes, approved Wednesday, will allow realized gains and losses to be amortized over 15 years, instead of the current practice of smoothing over three years. Also, the limits for establishing the actuarial value of assets will be widened to 80% to 120% of market value, from 90% to 110%. In addition, all remaining unamortized gains or losses will be spread over a rolling 30-year schedule, three times as long as the current amortization period.
In addition, CalPERS staff will further examine the possible of creating a "rainy day" fund to which employers contribute extra amounts during flush years.