CalPERS has lost more than 20% in assets since July 1, said Clark McKinley, spokesman for the $197.6 billion system.
The California Public Employees’ Retirement System, Sacramento, was 92% funded as of June 30, down from 102% a year earlier.
The system’s investment return was about -2.5% for the year ended June 30, 10 percentage points less than its actuarially assumed investment return of 7.75%, according to a staff report to CalPERS’ benefits and program administration committee. “This … will reduce the funded status of all plans by about 10%,” the report stated.
“Such decline will no doubt have an impact on the funded status of plans at CalPERS and on the contribution rates that employers will have to pay in the future,” stated the report, which was on the impact of the market downturn on employer contribution rates.
Because of smoothing, employer contributions will not increase in the current fiscal year, but if declines continue at the rate of 20%, those contributions could increase to 4% from 2% for some of the system’s plans starting July 1, 2010, and the rest of the plans on July 1, 2011, the report stated.
